• Question 14 Which of the following statements is correct regarding payback method as a capital budgeting technique ?
• Question 15 A client wants to know how many years it will take before the accumulated cash flows from an investment exceed the initial investment , without taking the time value of money into account . Which of the following financial models should be used ?
• Question 16 Which of the following limitations is common to the calculations of payback period , discounted cash flow , internal rate of return , and net present value ?
• Question 17 A project has an initial outlay of $ 1,000 . The projected cash inflows are
• Question 18 Harvey Co . is evaluating a capital investment proposal for a new machine . The investment proposal shows the following information :
• Question 19 How are the following used in the calculation of the net present value of a proposed project ? Ignore income tax considerations .
• Question 20 In considering the payback period for three projects , Fly Corp . gathered the following data about cash flows :
• Question 21 The discount rate ( hurdle rate of return ) must be determined in advance for the
• Question 22 Which of the following statements is correct regarding financial decision making ?
• Question 23 Which of the following is necessary in order to calculate the payback period for a project ?
• Question 24 An efficient portfolio is one that
• Question 25 Which of the following scenarios would encourage a company to use short-term loans to retire its ten-year bonds that have five years until maturity ?
• Question 26 What is the formula for calculating the profitability index of a project ?
• Question 27 The profitability index is a variation on which of the following capital budgeting models ?
• Question 28 Assume that management of Trayco has generated the following data about an investment project that has a five-year life :