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Engineering Economy, 5/e

Leland Blank, Texas A&M University
Anthony Tarquin, University of Texas - El Paso

After-Tax Economic Analysis

Matching Quiz

Select the correct answers on the left to fill in the blanks on the right. There are more answers than questions, therefore, some of the items on the right will remain unused. When you have completed the quiz, click the SUBMIT button at the bottom.


1				The depreciation amount is not directly included in CFAT, but depreciation is directly involved in the ________________ calculation.


2				Economic value added (EVA) indicates a project's contribution to corporate ___________.


3				To determine before-tax ROR, divide the after-tax ROR by ____________.


4				If the computation (selling price - book value) is positive, it gives the amount of the _____________.


5				Accelerated depreciation methods have a ______________ PW of taxes than the straight line method.


6				The cost of interest capital in an EVA analysis is calculated as the after-tax interest rate times __________________.


7				The EVA and CFAT estimates result in the selection of the same alternative because their _______________.

Answer choices for questions 1 through 7

A)	Taxable income
B)	AW values are the same
C)	(1-T_e )ⁿ
D)	Annual estimated values are equal
E)	Capital loss
F)	Book value in year t-1
G)	CFBT
H)	Depreciation recapture
I)	Higher
J)	Operating expenses
K)	Cost of interest capital
L)	First cost
M)	Net profit after taxes
N)	1 - effective tax rate
O)	Effective tax rate
P)	Lower

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