Chapter 21 - Quiz

Chapter 21 - Quiz - Accounting 245 Cost Accounting Chapter...

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Accounting 245 – Cost Accounting Chapter 21 Quiz - 10 points   Name: _______________________________________ 1. One criticism of the payback method is that it ignores cash flows that occur after the payback point has been reached. T / F 2. The cost of capital involves a blending of costs of all sources of capital funds, both debt and equity, and is also know as the “hurdle rate” and “discount rate”. T / F 3. If the internal rate of return is used as the discount rate in computing net present value, the net present value will be: A) positive. B) negative. C) zero. D) unknown. 4. Cause Company is planning to invest in a machine with a useful life of five years and no salvage value. The machine is expected to produce cash flow from operations of $20,000 in each of the five years. Cause's required rate of return is 10%. The maximum price that the company would pay for the machine would be: A) $32,220. B)
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Chapter 21 - Quiz - Accounting 245 Cost Accounting Chapter...

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