Finance Quiz7 Ch 8 - Finance Quiz 7 Ch 8 1 QUESTION 1 The...

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Finance Quiz 7 Ch 8 QUESTION 1 1. The process of identifying which long-lived investment projects a firm should undertake is known as: 1 . capital spending. 2 . capital hedging. 3 . capital investment. 4 . capital budgeting. 10 points QUESTION 2 1. The main virtue of the payback method is its: 1 . complexity. 2 . thoroughness. 3 . simplicity. 4 . completeness. 10 points QUESTION 3 1. The payback method: 1 . is the best method for evaluating complex projects. 2 . is the amount of time it takes for a project to recoup its profits. 3 . is never used by businesses today. 4 . fails to explicitly consider the time value of money. 10 points QUESTION 4 1. The preferred technique for evaluating most capital investments is 1 . discount payback period 2 . internal rate of return 3 . payback period 4 . net present value 10 points QUESTION 5 1. Potential problems in using the IRR as a capital budgeting technique include:
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Finance Quiz 7 Ch 8 1 . the timing problem 2 .
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