• 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 decisionmaking 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 fiveyear life :
• Question 13 Assume that management of Trayco has generated the following data about an investment project that has a fiveyear life :
• Question 14 Which of the following statements is correct regarding payback method as a capital budgeting technique ?