California State University, Long Beach ACCT MANAGERIAL Chapter 14 (Quiz 10) Question1)Which of the following is NOT a step in a capital investment financial analysis? -              Measure the financial impact -                              Assess the project’s returns -              Estimate the project cost of capital -              Estimate the project’s cash flows   Question 2 Which of the following statements about project cash flow estimation is NOt correct? -              Inflation effects should be considered -              The effects on a business’s other projects should be included -              Opportunity costs should be considered -                              Sunk costs should be included   Question 3 The internal rate of return (IRR) of a capital investment -              Measures the dollar profitability of a project -              Changes when the cost of capital changes -              Measures the length of time that it takes a business to recover its initial investment in the project -                              Must exceed the project cost of capital to make the investment financially acceptable   Question 4 Which of the following statements about project classifications is most correct? -              Projects are classified by purpose, such as replacement projects -              Projects are classified by size, such as less than $1 million -              Projects are classified by life, such as less than five years -                              Both a and b are correct -              All a, b, and c, are correct   Question 5 Return on investment (ROI) can be measured in either dollar or rate of return terms

California State University, Long Beach

ACCT MANAGERIAL

Chapter 14 (Quiz 10)

Question1)Which of the following is NOT a step in a capital investment financial analysis?

-              Measure the financial impact

-                              Assess the project’s returns

-              Estimate the project cost of capital

-              Estimate the project’s cash flows

Question 2

Which of the following statements about project cash flow estimation is NOt correct?

-              Inflation effects should be considered

-              The effects on a business’s other projects should be included

-              Opportunity costs should be considered

-                              Sunk costs should be included

Question 3

The internal rate of return (IRR) of a capital investment

-              Measures the dollar profitability of a project

-              Changes when the cost of capital changes

-              Measures the length of time that it takes a business to recover its initial investment in the project

-                              Must exceed the project cost of capital to make the investment financially acceptable

Question 4

Which of the following statements about project classifications is most correct?

-              Projects are classified by purpose, such as replacement projects

-              Projects are classified by size, such as less than $1 million

-              Projects are classified by life, such as less than five years

-                              Both a and b are correct

-              All a, b, and c, are correct

Question 5

Return on investment (ROI) can be measured in either dollar or rate of return terms. Which of the following about ROI is NOT correct?

-                              The calculation of IRR requires the project cost of capital

-              The calculation of NPV requires the project cost of capital

-              IRR is a rate of return measure

-              NPV is a dollar return measure