FIN 571 Course Great Wisdom / tutorialrank.com FIN 571 Course Great Wisdom / tutorialrank.com | Page 11

40.fitability index of an investment project is the ratio of the:
net present value of the project’s cash outflows divided by the net
present value of its inflows.
net present value of every project cash flow to the initial cost.
present value of the Time 1 and subsequent cash flows to the initial
cost.
internal rate of return to the current market rate of interest.
average net income to the average investment.

41.No matter how many forms of investment analysis you employ:
the internal rate of return will always produce the most reliable
results.
only the first three years of a project ever affect its final outcome.
the actual results from a project may vary significantly from the
expected results.
the initial costs will generally vary considerably from the estimated
costs.
a project will never be accepted unless the payback period is met.