Sm Ch 26

CHAPTER 26
CAPITAL BUDGETING
OVERVIEW OF BRIEF EXERCISES, EXERCISES, PROBLEMS, AND CRITICAL
THINKING CASES
Brief
Exercises
B. Ex. 26.1
B. Ex. 26.2
B. Ex. 26.3
B. Ex. 26.4
B. Ex. 26.5
B. Ex. 26.6
B. Ex. 26.7
B. Ex. 26.8
B. Ex. 26.9
B. Ex. 26.10

Topic
Understanding payback period
Use of return on investment
Comparing NPV and required rate of return
Net present value computations
Computations for payback period
Capital investment challenges
Net present value and required rate of return
Capital budgeting behaviors
Net present value analysis
Nonfinancial investment concerns

Exercises
26.1
26.2

Topic
Accounting terminology
Payback period

26.3
26.4
26.5
26.6
26.7
26.8
26.9
26.10
26.11
26.12

Learning
Objectives
26-3
26-3
26-3, 26-4
26-3
26-3
26-1, 26-2
26-3, 26-4
26-5
26-3
26-2

Skills
Analysis
Analysis
Analysis
Analysis
Analysis
Analysis, judgment
Analysis, judgment
Analysis, judgment
Analysis
Analysis, communication, judgment Learning
Objectives
Skills
26-1–26-5 Analysis
26-1–26-3 Analysis, communication, judgment Understanding return on average investment
26-1, 26-3 Analysis
Discounting cash flows
26-3
Analysis
Understanding net present value relationships
26-3
Analysis
Analyzing a capital investment proposal
26-1, 26-3 Analysis
Analyzing capital investment proposal
26-1–26-4 Analysis, communication, judgment Analyzing capital investment proposal
26-1, 26-3 Analysis
Competing investment proposals
26-1, 26-2, Analysis, communication,
26-5
judgment
Replacing existing equipment
26-1–26-3, Analysis, communication,
26-5
judgment
Gains and losses on sale of equipment
26-3
Analysis
Depreciation effects on cash flows
26-3
Analysis

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Learning
Exercises
Topic
Objectives
Skills
26.13
Net present value in a not-for-profit
26-2, 26-3 Analysis, communication, judgment 26.14
NPV of uneven cash flows
26-3
Analysis
26.15
Real