(Answered) Answer the following questions and problems from chapter 7

Finance

Answer the following questions and problems from Chapter 7, page 328 of the text, 2, 3, 6, 8, 9. List and describe the three decision rules when using the Internal Rate of Return.

1. Comment on the following statement: When a not-for-profit facility receives a contribution from a member of the community, the cost of capital is inconsequential when deciding how to use this contribution because it is, in effect, free money.

2. From a capital investment point of view what are the goals of a facility?

3. Why do pro forma income statements adjust for depreciation expense when developing project cash flows for a project?

4. When performing a capital budgeting analysis, what costs should be included and costs should be excluded as part of an initial investment.

5. Why are financing flows such as interest expense and dividen payments excluded from the computation of cash flows?

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