Homework8-15Review - Assignment Print View 1 Page 1 of 23 Award 1.00 point The net present value of an investment represents the difference between the

Homework8-15Review - Assignment Print View 1 Page 1 of 23...

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1. Award: 1.00 point The net present value of an investment represents the difference between the investment's: cash inflows and outflows. cost and its net profit. cost and its market value. cash flows and its profits. assets and liabilities. References Multiple Choice Learning Objective: 08-04 Evaluate proposed investments by using the net present value criterion. Difficulty: 1 Basic Section: 8.1 Net Present Value Page 1 of 23 Assignment Print View 12/2/2016
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2. Award: 1.00 point Which one of the following statements is correct? A longer payback period is preferred over a shorter payback period. The payback rule states that you should accept a project if the payback period is less than one year. The payback period ignores the time value of money. The payback rule is biased in favor of long-term projects. The payback period considers the timing and amount of all of a project's cash flows. References Multiple Choice Learning Objective: 08-01 Summarize the payback rule and some of its shortcomings. Difficulty: 1 Basic Section: 8.2 The Payback Rule Page 2 of 23 Assignment Print View 12/2/2016
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3. Award: 1.00 point Which one of the following is the primary advantage of payback analysis? Incorporation of the time value of money concept Ease of use Research and development bias Arbitrary cutoff point Long-term bias References Multiple Choice Learning Objective: 08-01 Summarize the payback rule and some of its shortcomings. Difficulty: 1 Basic Section: 8.2 The Payback Rule Page 3 of 23 Assignment Print View 12/2/2016
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4. Award: 1.00 point The payback method of analysis ignores which one of the following? Initial cost of an investment Arbitrary cutoff point Cash flow direction Time value of money Timing of each cash inflow References Multiple Choice Learning Objective: 08-01 Summarize the payback rule and some of its shortcomings. Difficulty: 1 Basic Section: 8.2 The Payback Rule Page 4 of 23 Assignment Print View 12/2/2016
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5. Award: 1.00 point Which one of the following methods of analysis is most similar to computing the return on assets (ROA)? Internal rate of return Profitability index Average accounting return Net present value Payback References Multiple Choice Learning Objective: 08-02 Discuss accounting rates of return and some of the problems with them. Difficulty: 1 Basic Section: 8.3 The Average Accounting Return Page 5 of 23 Assignment Print View 12/2/2016
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6. Award: 1.00 point The profitability index reflects the value created per dollar: invested.
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