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6. A capital investment has a net present value of $1 000 at a rate of return of 10 percent. At a 12 percent rate of return, the net present value of the investment is $100. At a 14 percent rate of return, the net present value of the investment is $0. Under what circumstance should the project be rejected? When the required rate of return: а. exceeds 12 percent b. is less than 12 percent C. exceeds 14 percent d. is less than 14 percent

6. A capital investment has a net present value of $1 000 at a rate of return of 10 percent. At a 12 percent rate of return, the net present value of the investment is $100. At a 14 percent rate of return, the net present value of the investment is $0. Under what circumstance should the project be rejected? When the required rate of return: а. exceeds 12 percent b. is less than 12 percent C. exceeds 14 percent d. is less than 14 percent

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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6. A capital investment has a net present value of $1 000 at a rate of return of 10 percent. At a 12 percent rate of return, the net present value of the investment is $100. At a 14 percent rate of return, the net present value of the investment is $0. Under what circumstance should the project be rejected? When the required rate of return: a. exceeds 12 percent b. is less than 12 percent C. exceeds 14 percent d. is less than 14 percent 7. What is the budgeted production for the month of September? The Lubriderm Corporation has the following budgeted sales for the next six-month period: Month Unit sales June July August September October November 90,000 120,000 210,000 150,000 180,000 120,000 a. $156 000 b. $188 000 C. 256 000 d. $198 000
Transcribed Image Text:6. A capital investment has a net present value of $1 000 at a rate of return of 10 percent. At a 12 percent rate of return, the net present value of the investment is $100. At a 14 percent rate of return, the net present value of the investment is $0. Under what circumstance should the project be rejected? When the required rate of return: a. exceeds 12 percent b. is less than 12 percent C. exceeds 14 percent d. is less than 14 percent 7. What is the budgeted production for the month of September? The Lubriderm Corporation has the following budgeted sales for the next six-month period: Month Unit sales June July August September October November 90,000 120,000 210,000 150,000 180,000 120,000 a. $156 000 b. $188 000 C. 256 000 d. $198 000
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