Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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![7. All of the following are examples of cash outflows, except:
a. Expenses.
b. Scholarships.
c. Monthly loan payment.
d. Initial investment.
8. Alternatives can be:
a. Mutually exclusive or independent.
b. Only Independent.
c. Mutually exclusive and independent.
d. Only Mutually exclusive.
9. In comparing mutually exclusive alternatives by the ROR method, you should select:
a. The alternative with the largest initial investment that has been incrementally justified.
b. The alternative with the largest initial investment with the highest ROR.
c. The alternative whose incremental ROR is the highest
d. The alternative with ROR that has the lowest initial investment cost.
10. In a conventional B/C ratio:
a. Disbenefits and M&O costs are subtracted from benefits.
b. Disbenefits are subtracted from benefits and M&O costs are included in costs.
c. Disbenefits and M&O costs are added to costs.
d. Disbenefits are added to costs and M&O costs are subtracted from benefits.
11. The following are examples of public sector projects, except:
a. Cleaning LITANEY river.
b. Major Sewer system.
National and interna
d. National water treatment.
12. In calculating the annual worth of an alternative over one life cycle, the value obtained is:
a. The same value that would be obtained if two or more life cycles were used to calculate the annual
worth.
b. The same value that would be obtained in calculating the annual worth of infinite service for the
alternative.
c. The same value that would be obtained if the present worth of one life cycle were annualized over the](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdc206010-13ea-47d7-80d2-4b2d7c8b0106%2F7a902314-7741-43d4-9c1f-fb26ce201b33%2Fqsf97j_processed.jpeg&w=3840&q=75)
Transcribed Image Text:7. All of the following are examples of cash outflows, except:
a. Expenses.
b. Scholarships.
c. Monthly loan payment.
d. Initial investment.
8. Alternatives can be:
a. Mutually exclusive or independent.
b. Only Independent.
c. Mutually exclusive and independent.
d. Only Mutually exclusive.
9. In comparing mutually exclusive alternatives by the ROR method, you should select:
a. The alternative with the largest initial investment that has been incrementally justified.
b. The alternative with the largest initial investment with the highest ROR.
c. The alternative whose incremental ROR is the highest
d. The alternative with ROR that has the lowest initial investment cost.
10. In a conventional B/C ratio:
a. Disbenefits and M&O costs are subtracted from benefits.
b. Disbenefits are subtracted from benefits and M&O costs are included in costs.
c. Disbenefits and M&O costs are added to costs.
d. Disbenefits are added to costs and M&O costs are subtracted from benefits.
11. The following are examples of public sector projects, except:
a. Cleaning LITANEY river.
b. Major Sewer system.
National and interna
d. National water treatment.
12. In calculating the annual worth of an alternative over one life cycle, the value obtained is:
a. The same value that would be obtained if two or more life cycles were used to calculate the annual
worth.
b. The same value that would be obtained in calculating the annual worth of infinite service for the
alternative.
c. The same value that would be obtained if the present worth of one life cycle were annualized over the
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