Fundamentals of Corporate Finance Study Set 23

Business

Quiz 9 :

Making Capital Investment Decisions

Quiz 9 :

Making Capital Investment Decisions

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Rossiter Restaurants is analyzing a project that requires $180,000 of fixed assets.When the project ends, those assets are expected to have an aftertax salvage value of $45,000.How is the $45,000 salvage value handled when computing the net present value of the project?
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B

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Which one of the following methods of project analysis is defined as computing the value of a project based upon the present value of the project's anticipated cash flows?
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B

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Which one of the following increases the net present value of a project?
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D

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Which one of the following methods determines the amount of the change a proposed project will have on the value of a firm?
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Net present value:
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The internal rate of return is defined as the:
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A project has a net present value of zero.Which one of the following best describes this project?
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There are two distinct discount rates at which a particular project will have a zero net present value.In this situation, the project is said to:
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A project's average net income divided by its average book value is referred to as the project's average:
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Why is payback often used as the sole method of analyzing a proposed small project?
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The present value of an investment's future cash flows divided by the initial cost of the investment is called the:
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You are viewing a graph that plots the NPVs of a project to various discount rates that could be applied to the project's cash flows.What is the name given to this graph?
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If a project has a net present value equal to zero, then:
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If a firm accepts Project A it will not be feasible to also accept Project B because both projects would require the simultaneous and exclusive use of the same piece of machinery.These projects are considered to be:
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The length of time a firm must wait to recoup the money it has invested in a project is called the:
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A project has an initial cost of $27,400 and a market value of $32,600.What is the difference between these two values called?
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Which one of the following will decrease the net present value of a project?
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Which of the following are advantages of the payback method of project analysis? I.works well for research and development projects II.liquidity bias III.ease of use IV.arbitrary cutoff point
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The length of time a firm must wait to recoup, in present value terms, the money it has in invested in a project is referred to as the:
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Which one of the following is a project acceptance indicator given an independent project with investing type cash flows?
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