**Capital Investment Decision Postaudit: Identifying Incorrect Statements****Multiple Choice Question:**Select the **incorrect** statement regarding postaudits of capital investment decisions.1. ○ A postaudit should be conducted at the end of the project.2. ○ The postaudit helps management determine whether a project that had been accepted should have been rejected.3. ● A postaudit is only necessary for a capital investment selected using a technique that does not consider the time value of money.4. ○ The goal of a postaudit is to provide feedback that can be used to improve the accuracy of future capital investment decisions.**Explanation:**The third statement is marked as incorrect. A postaudit is beneficial for all types of capital investment decisions regardless of the technique used, including those that do consider the time value of money. Postaudits provide valuable feedback and learning opportunities for improving future investment decisions.

Post audit is an analysis of the outcome of a capital budgeting investment. This analysis is…

Answered: Select the Incorrect statement…

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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While the NPV is proven to be the correct way of analyzing projects, it seems that its accuracy is enhanced by use of the IRR to determine how sensitive the NPV is to the cost of capital. Given this apparent reality that both tools contribute critical information to final business decisions, shouldn’t both the NPV and IRR be included in every analysis?
None
Discuss and explain in details the five most typical and common mistakes when making assumptions for and preparing cashflow projection for investment project proposal?
i. Whether profitable project or non-profit project the time value of money is important consideration among project planners and profesions develop a case of your choice demonstrating future value and present value computations to validate this statement ii. Define the following terms a) Cost benefit analysis b) Time value of money c) Capital d) Multiple rate of return e) Institutional appraisal
Which of the following is FALSE regarding various methods of project analysis? Both NPV and IRR consider the time value of money. Average Accounting Return ignores the time value of money. Payback focuses on liquidity. O Profitability Index is able to rank projects in the situation of capital rationing. () Payback considers the time value of money. Next Page Page 17 of 3 Previous Page Submit Quiz O of 30 questions saved
State whether the following statement true or false and provide a brief explanation
A preference decision in capital budgeting: O is concerned with whether a project clears the minimum required rate of return hurdle. comes before the screening decision. O is concerned with determining which of several acceptable alternatives is best. O involves using market research to determine customers' preferences.
Requirments (a) Calculate the, the Payback Period, and the net Present Value of for each project.b) For each of the above methods of project appraisal recommend which project should be taken up. c) Using all the information gathered from the above techniques which project would you recommend giving the reasons for this decision. d) Explain the uses, limitations and merits of the Payback Period compared to Net Present Value in investment appraisal.
Select all that are true with respect to the payback period for making capital investment decisions. Group of answer choices The payback period is the amount of time it takes for a project to generate breakeven income The payback period is the amount of time it takes for a project's cumulative cash flows to become zero The payback period ignores all cash flows beyond a specified required payback period The payback period ignores a project's initial investment The payback period ignores the time value of money
Discuss what reason to decide whether to accept or reject a project. Your should refer to all four investment appraisal methods.
Which capital budgeting technique step in the decision process is not used to evaluate a group of independent projects? Multiple Choice Compute the statistic. Have a runoff between the mutually exclusive projects choosing the one with the best statistic. Compare the computed statistic with the benchmark to decide to accept or reject the project. All of these choices are used.

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