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ACC 162 Planning for capital investments PART 8 MULTIPLE CHOICE QUESTIONS 126. If the internal rate of return is less than the discount rate, then the net present value of a project is a. positive. b. negative. c. zero. d. one. 127. If a project has a negative net present value, the internal rate of return will be a. less than the discount rate. b. greater than the discount rate. c. equal to the discount rate. d. a negative rate ...

Other / Other 05 Nov 2016

ACC 162 Planning for capital investments PART 3 MULTIPLE CHOICE QUESTIONS 26. The capital budget for the year is approved by a company's a. board of directors. b. capital budgeting committee. c. officers. d. stockholders. 27. All of the following are involved in the capital budgeting evaluation process except a company's a. board of directors. b. capital budgeting committee. c. officers. d. stockholders. 28. Most of the capit ...

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ACC 162 Planning for capital investments PART 1 CHAPTER STUDY OBJECTIVES 1. Discuss capital budgeting evaluation and explain inputs used in capital budgeting. 2. Describe the cash payback technique. 3. Explain the net present value method. 4. Identify the challenges presented by intangible benefits in capital budgeting 5. Describe the profitability index. 6. Indicate the benefits of performing a post-audit. 7. Explain ...

Other / Other 05 Nov 2016

ACC 162 Planning for capital investments PART 6 MULTIPLE CHOICE QUESTIONS 86. The profitability index a. does not take into account the discounted cash flows. b. is calculated by dividing total cash flows by the initial investment. c. allows comparison of the relative desirability of projects that require differing initial investments. d. will never be greater than 1. 87. The capital budgeting method that allows comparison of the re ...

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ACC 162 Planning for capital investments PART 9 MULTIPLE CHOICE QUESTIONS BRIEF EXERCISES BE 148 Diamond Company is considering investing in new equipment that will cost $600,000 with a 10-year useful life. The new equipment is expected to produce annual net income of $40,000 over its useful life. Depreciation expense, using the straight-line rate, is $60,000 per year. Instructions Compute the cash payback period. BE 149 Madel ...

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ACC 202 CHAPTER 12 PLANNING FOR CAPITAL INVESTMENTS PART 2 Ex. 171 Mimi Company is considering a capital investment of $275,000 in new equipment. The equipment is expected to have a 5-year useful life with no salvage value. Depreciation is computed by the straight-line method. During the life of the investment, annual net income and cash inflows are expected to be $25,000 and $80,000, respectively. Mimi's minimum required rate of return is ...

Other / Other 05 Nov 2016

ACC 162 Planning for capital investments PART 4 MULTIPLE CHOICE QUESTIONS 46. The cash payback technique a. considers cash flows over the life of a project. b. cannot be used with uneven cash flows. c. is superior to the net present value method. d. may be useful as an initial screening device. 47. If an asset costs $210,000 and is expected to have a $30,000 salvage value at the end of its ten-year life, and generates annual net c ...

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ACC 202 CHAPTER 12 PLANNING FOR CAPITAL INVESTMENTS PART 1 Brief Exercises BE 158 Diamond Company is considering investing in new equipment that will cost $1,400,000 with a 10-year useful life. The new equipment is expected to produce annual net income of $90,000 over its useful life. Depreciation expense, using the straight-line rate, is $140,000 per year. Instructions Compute the cash payback period. BE 159 Madeline Company i ...

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ACC 162 Planning for capital investments PART 7 MULTIPLE CHOICE QUESTIONS 106. A company has a minimum required rate of return of 8%. It is considering investing in a project that costs $91,116 and is expected to generate cash inflows of $36,000 each year for three years. The approximate internal rate of return on this project is a. 8%. b. 9%. c. 10%. d. less than the required 8%. Use the following information for questions 107â€â ...

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ACC 162 Planning for capital investments PART 10 MULTIPLE CHOICE QUESTIONS SHORT-ANSWER ESSAY QUESTIONS S-A E 177 Management uses several capital budgeting methods in evaluating projects for possible investment. Identify those methods that are more desirable from a conceptual standpoint, and briefly explain what features these methods have that make them more desirable than other methods. Also identify the least desirable method and ex ...

Other / Other 05 Nov 2016