Match Each Term with the Appropriate Definition

question 219

Multiple Choice

Match each term with the appropriate definition.Not all definitions will be used.
-Net book value

• A)When a company expenses the entire cost of a long-lived asset in the first year of use.
• B)When a company receives free publicity in return for charitable contributions.
• C)A tax law dealing with how companies can depreciate their assets.
• D)The acquisition cost of an asset minus its accumulated depreciation.
• E)When a company expenses the cost of a long-lived asset by a constant annual amount.
• F)The exclusive right to sell or use a product or process that is granted to encourage innovation.
• G)Net income plus interest,taxes,depreciation and amortization expenses.
• H)Tangible long-lived assets.
• I)An intangible asset that represents the value of unidentifiable assets acquired.
• J)Names or images that appear with a ® or ^TM.
• K)What a company expects to receive when an asset is disposed of at the end of its useful life.
• L)Assets whose values do not change over time.
• M)When a company allocates the cost of a long-lived asset at a higher rate in the first years of use.
• N)The estimated total use a company expects to receive from an asset.

Identify break-even EBIT under various capital structures.

Understand the effect of adding financial leverage on a firm's value.

Calculate the value of a firm before and after restructuring with and without taxes.

Determine the levered value of equity when adding debt to the capital structure.

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Definitions:

Opportunity Cost

The cost of foregoing the next best alternative when making a decision, representing the benefits one could have received by choosing a different option.

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Direct Labor Efficiency

A measure of the productivity of workers involved directly in manufacturing, calculated as actual hours worked versus standard hours.

Direct Labor Price

Refers to the rate paid for the labor directly involved in the production of goods or services.