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.