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Question 1 4 / 4 pts The calculation of the payback period for an investment when net cash flow is even (equal) is: Total net cash flow/Annual net cash flow Total net cash flow/Cost of investment Annual net cash flow/Cost of investment Cost of investment/Annual net cash flow Question 2 4 / 4 pts Capital investment decisions often involve all of the following except _________________
Question 1
4 / 4 pts
The calculation of the payback period for an investment when net cash flow is even (equal) is:
Total net cash flow/Annual net cash flow
Total net cash flow/Cost of investment
Annual net cash flow/Cost of investment
Cost of investment/Annual net cash flow
4 / 4 pts
Capital investment decisions often involve all of the following except _________________.
short periods of time
risk
qualitative factors or considerations
large amounts of money
4 / 4 pts
Which of the following is an objective of capital budgeting?
To eliminate all risk.
To reduce the number of investment activities.
To earn a satisfactory return on investment.
To reverse past decisions.
0 / 4 pts
The time value of money concept:
Means that a dollar tomorrow is worth more than a dollar today.
Means that a dollar today is worth less than a dollar tomorrow.
Means that a dollar today is worth more than a dollar tomorrow.
Means that "Time is money."
0 / 4 pts
An estimate of an asset's value to the company, calculated by discounting the future cash flows from the investment at the project's required rate of return and then subtracting the initial amount of the investment, is known as:
Net present value.
Annual net cash flows.
Unamortized carrying value.
Payback period.
Expert Solution
Question 1
4 / 4 pts
The calculation of the payback period for an investment when net cash flow is even (equal) is:
Total net cash flow/Annual net cash flow
Total net cash flow/Cost of investment
Annual net cash flow/Cost of investment
Correct!
Cost of investment/Annual net cash flow
4 / 4 pts
Capital investment decisions often involve all of the following except _________________.
Correct!
short periods of time
risk
qualitative factors or considerations
large amounts of money
4 / 4 pts
Which of the following is an objective of capital budgeting?
To eliminate all risk.
To reduce the number of investment activities.
Correct!
To earn a satisfactory return on investment.
To reverse past decisions.
0 / 4 pts
The time value of money concept:
You Answered
Means that a dollar tomorrow is worth more than a dollar today.
Means that a dollar today is worth less than a dollar tomorrow.
Correct answer
Means that a dollar today is worth more than a dollar tomorrow.
Means that "Time is money."
0 / 4 pts
An estimate of an asset's value to the company, calculated by discounting the future cash flows from the investment at the project's required rate of return and then subtracting the initial amount of the investment, is known as:
Correct answer
Net present value.
You Answered
Annual net cash flows.
Unamortized carrying value.
Payback period.
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