ACC 544 EDU Extraordinary Success/acc544edu.com ACC 544 EDU Extraordinary Success/acc544edu.com | Page 6

• Question 1 Which of the following statements about investment
decision models is true?
• Question 2 Which of the following events would decrease the
internal rate of return of a proposed asset purchase?
• Question 3 Which of the following is a disadvantage of the internal
rate of return as a method of evaluating investments?
• Question 4 Net present value (NPV) and internal rate of return
(IRR) differ in that
• Question 5 Which of the following characteristics represent an
advantage of the internal rate of return technique over the accounting
rate of return technique in evaluating a project?
• Question 6 It is assumed that cash flows are reinvested at the rate
earned by the investment in which of the following capital budgeting
techniques?
• Question 7 Which of the following changes would result in the
highest present value?
• Question 8 Which of the following is an advantage of net present
value modeling?
• Question 9 The Bread Company is planning to purchase a new
machine which it will depreciate on a straight-line basis over a 10-year
period. A full year’s depreciation will be taken in the year of
acquisition. The machine is expected to produce cash flow from
operations, net of income taxes, of $3,000 in each of the 10 years.; The
accounting (book value) rate of return is expected to be 10% on the
initial increase in required investment. The cost of the new machine
will be
• Question 10 Net present value as used in investment decision-
making is stated in terms of which of the following options?
• Question 11 On January 1, 2012, Colt Company issued 10-year
bonds with a face amount of $1,000,000 and a stated interest rate of
8% payable annually on January 1. The bonds were priced to yield
10%. Present value factors are as follows:
• Question 12 Assume that management of Trayco has generated the
following data about an investment project that has a five-year life: