ACC 281 quiz 5-97

______ is a measure of how much value is created or added today by undertaking an investment. Multiple choice question. The internal rate of return The profitability index Net present value Average accounting return

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Which one of the following is an indicator that an investment is acceptable? Check all that apply: Profitability index equal 1.5 Profitability index greater than 0 the required return less than internal rate of return IRR equal to zero Payback period exceeds the required period Profitability index equal 1

Base on the “Problems - Series A” section 10-19A of Ch. 10, “Planning for Capital Investments” of Fundamental Managerial Accounting Concepts.   How can I Analyze the results of the net present value calculations and the significance of these results, supported with examples. along with Determining which project should be adopted based on the net present value approach and provide a rationale for your decision. Analyze the results of the internal rate of return calculation and the significance of these results, supported with examples. Determining which project should be adopted based on the internal rate of return approach and provide a rationale for your decision. Determining the preferred method in the given circumstances and provide reasoning and details to support the method selected. Synthesize results of analyses and computations to determine the best investment opportunity to recommend to the president of Donovan Enterprises.

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Which approach to investment analysis is "best" in terms of accounting for both the timing and amount of revenue streams from a potential investment? A.  the payback period B.  the simple rate of return C.   the net present value D. the internal rate of return

Financial accounting: the payback period method

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Question 2 You must choose between two investments, X and Y . The profitability index (PI), net present value (NPV) and internal rate of return (IRR) of the two investments are as follows: Criteria Investment X Investment Y NPV R44 000 −R22 000 PI 1,945 0,071 IRR 16,00% 8,04% Which investment(s) should you choose, taking all the above criteria into consideration, if the cost of capital is equal to 12% per year? [1] X [2] Y [3] Both X and Y [4] Neither X nor Y [5] Too little information to make a decision 17 DSC1630

Which of the following correctly orders the investment rules of average accounting return (AR), internal rate of return (IRR), and net present value (NPV) from the most desirable to the least desirable? a. IRR, AR, NPV. b. AR, IRR, NPV. c. NPV, AR, IRR. d. AR, NPV, IRR. e. NPV, IRR, AR.

The following are investment criteria: net present value, payback, profitability index, average accounting return, and the internal rate of return. Question: Which one of these is the most valuable from a financial point of view, and why? (Answer the question correctly and in-depth.)

Which of the following decision criteria is the easiest to use and very popular among investors? O Payback period. O Internal rate of return. O Average accounting return. Net present value. O Discounted return on investment.

Which of the following are the key factors when determining asset allocation for an investment? I. Time an investor has until he needs to use the money from the investment (time horizon) II. Risk preferences (tolerance for risk) III. Current financial situation   a. I., II., & III.   b. I. & III.    c. II. & III.   d. I. & II.

The present value of an investment's future cash flows divided by its initial cost is the: O Net present value. O Internal rate of return. O Average accounting return. O Profitability index. O Payback period.

A realized return is the rate of return actually earned on an investment. Group of answer choices True False

Q44 Cost of the capital is the minimum required rate of earnings or the cut-off rate of capital expenditure, is defined by a. William and Donaldson b. John J. Hampton c. Solomon Ezra d. James C. Van Horne