29 Jun Question 46. Which of the foll
Question
46. Which of the following statements is true regarding the payback period?
A. The time value of money is considered when calculating the payback.
B. The payback analysis is more accurate than the net present value analysis.
C. The payback period is less accurate than the accounting rate of return.
D. The time value of money is not considered when calculating the payback.
Boccardi Inc., has invested in new pasta manufacturing equipment at a cost of $48,000. The equipment has an estimated useful life of eight years. Estimated annual sales and operating expenses related to the pasta equipment follow:
47. The estimated payback of the investment in the pasta equipment is:
A. 3.0 years.
B. 4.0 years.
C. 6.0 years.
D. 8.0 years.
48. The estimated accounting rate of return is:
A. 12.5%.
B. 18.0%.
C. 25.0%.
D. 33.3%.
49. In a capital budgeting decision, if a firm uses the net present value method and a 12% discount rate, what does a negative net present value indicate?
A. The proposal’s rate of return exceeds 12%.
B. The proposal’s rate of return is less than the minimum rate required.
C. The proposal earns a rate of return between 10% and 12%.
D. None of the above.
50. A capital budgeting decision method that considers the time value of money is the
A. accounting rate of return method.
B. return on stockholders’ equity method.
C. cash payback method.
D. internal rate of return method.
51. Which of the following is a true statement regarding the internal rate of return in capital budgeting?
A. It provides the same basic information as the net present value method.
B. It calculates the net present value of future cash flows.
C. It calculates the proposal’s rate of return.
D. It doesn’t consider the time value of money.
52. Which of the following is a true statement regarding the net present value method in capital budgeting?
A. It provides the same basic information as the accounting rate of return.
B. It calculates the present value of future cash flows.
C. It calculates the proposal’s rate of return.
D. It doesn’t consider the time value of money.
53. Sometimes when management decisions are reached the investment project with the highest NPV or IRR is not selected. This occurs because:
A. a lower IRR is a less risky investment.
B. the highest NPV is not necessarily the highest IRR.
C. qualitative factors override quantitative analysis techniques.
D. sometimes management makes the wrong decision.
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.