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NEW QUESTION: 1
Regarding the net present value of a replacement decision, which of the following statements is false?
A. An increase in net working capital is treated as an outflow when the project begins and as an inflow when the project ends.
B. The present value of depreciation expenses on the new equipment, multiplied by the tax rate, is treated as an inflow.
C. The present value of the after-tax cost reduction benefits resulting from the new investment is treated as an inflow.
D. The after-tax market value of the old equipment is treated as an inflow at t = 0.
E. Any loss on the sale of the old equipment is multiplied by the tax rate and is treated as an outflow at t
0.
Answer: E
Explanation:
Explanation/Reference:
Explanation:
Since the old equipment is sold at a loss which reduces taxable income, a tax savings is realized and is deducted from the investment outlay.

NEW QUESTION: 2
The purpose of business continuity planning and disaster-recovery planning is to:
A. Mitigate, or reduce, the risk and impact of a business interruption or disaster
B. Eliminate the risk and impact of a business interruption or disaster
C. Accept the risk and impact of a business
D. Transfer the risk and impact of a business interruption or disaster
Answer: A
Explanation:
The primary purpose of business continuity planning and disaster-recovery planning is to mitigate, or reduce, the risk and impact of a business interruption or disaster. Total elimination of risk is impossible.