Solved

Match the Following Terms with the Definitions and Descriptions Below

Question 61

Matching

Match the following terms with the definitions and descriptions below.

Premises:

Responses:

The process used for analyzing and selecting long-term investments.

Gain on disposal

An event that reduces a company's tax liability while not impacting pretax cash outflows.

Goal incongruence

The rate of return used by a company to determine whether or not the expected return on a potential long-term investment is large enough to merit the acquisition of the investment.

Net present value

A method of evaluating investments that uses the time value of money to assess whether the investment's expected rate of return is sufficient to merit its acquisition.

Tax Shield

A condition where an employee acts in his or her own best interest even if the action is not in the company's best interest.

Capital budgeting

When the proceeds of a sale exceed the book value of the asset sold.

Cost of capital

The proportion of fixed cost associated with a project.

MACRS

Federal tax law on depreciation.

Operating leverage

Premises:

The process used for analyzing and selecting long-term investments.

An event that reduces a company's tax liability while not impacting pretax cash outflows.

The rate of return used by a company to determine whether or not the expected return on a potential long-term investment is large enough to merit the acquisition of the investment.

A method of evaluating investments that uses the time value of money to assess whether the investment's expected rate of return is sufficient to merit its acquisition.

A condition where an employee acts in his or her own best interest even if the action is not in the company's best interest.

When the proceeds of a sale exceed the book value of the asset sold.

The proportion of fixed cost associated with a project.

Federal tax law on depreciation.

Responses:

Gain on disposal

Goal incongruence

Net present value

Tax Shield

Capital budgeting

Cost of capital

MACRS

Operating leverage

Correct Answer:

Premises:

Responses:

The process used for analyzing and selecting long-term investments.

An event that reduces a company's tax liability while not impacting pretax cash outflows.

The rate of return used by a company to determine whether or not the expected return on a potential long-term investment is large enough to merit the acquisition of the investment.

A method of evaluating investments that uses the time value of money to assess whether the investment's expected rate of return is sufficient to merit its acquisition.

A condition where an employee acts in his or her own best interest even if the action is not in the company's best interest.

When the proceeds of a sale exceed the book value of the asset sold.

The proportion of fixed cost associated with a project.

Federal tax law on depreciation.