• 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 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 five-year life:
• Question 13 Assume that management of Trayco has generated the following data about an investment project that has a five-year life: