1. Capital budgeting

a. Applies financial analysis to decision-making regarding project investment

b. Uses many of the same concepts and techniques as bond and stock analysis

c. Helps to determine if a project investment is worth more than the cost

d. Will increase the total value of the company if done successfully

e. All of the above

2. Eddy Corporation engaged in a transaction that generated $100,000 book income but only $81,000 taxable income. Which of the following is true?

If the $19,000 excess of book income over taxable income is temporary, the transaction has no effect on Eddy's deferred tax accounts.

The $19,000 excess of book income over taxable income is an unfavorable difference.

If the $19,000 excess of book income over taxable income is permanent, the transaction has no effect on Eddy's deferred tax accounts.

None of the above is true.