ACCT 212 Learnsmart Assignment 11 Liberty University Solution

A capital investment evaluation method that measures the expected time for the present value of the net cash flows to equal the initial cost of the investment is the:

A company is considering several investment opportunities. The investments have been evaluated using payback period and break-even time. Only one project will be chosen and time value of money is important. The company should choose the project which the:

The capital investment evaluation method compares the present value of the net cash flows to the initial amount invested is the:

A company is considering a capital investment of $45,000 in new equipment which will improve production and increase cash flows by $15,000 per year for 6 years. The company has a hurdle rate of 10%. The break-even time is approximately:

When using accounting rate of return to evaluate capital investment decisions, choose the project with the (1) risk, (2) payback period, and (3) return for the (4) time period.

A company needs to choose between two investment opportunities. Project 1 has a cost of $500,000 and expected NPV of cash flows of $450,000. Project 2 has a cost of $800,000 and expected NPV of cash flows of $750,000. Using profitability index as the evaluation method, the company should choose:

A company is considering a capital investment of $45,000 in new equipment which will improve production and increase flows by $15,000 per year for 6 years. The payback period is ____ years.

When comparing investment opportunities with approximately the same cost and risk level, choose the investment with the:

A company is considering a capital investment of $16,000 in new equipment which will improve production and increase cash flow for next five years at the following amounts: Year 1: $8,000; Year 2: $6,000; Year 3: $5,000; Year 4: $5,000. The payback period is __ years.

A company is considering two similar investment projects. One has an initial cost of $50,000 and the other an initial cost of $450,000. Which evaluation method would be most appropriate?

Assume straight-line depreciation and even cash flow. A company plans to purchase equipment for $25,000. The equipment will have $0 salvage value and increase after-tax income by $7,500 annually during it 5-year life. The accounting rate of return is ___%

Which of the following is the approximate internal rate of return for an investment that costs $45,880 and has net cash flow of $4,000 for 20 years?

Consider the following projects: Project A cost = $30,000, NPV of cash flows = $10,000; Project B: Cost = $45,000, NPV of cash flows = $10,000 Project C: Cost = $30,000, NPV of cash flows = $20,000; Project D: Cost = $40,000, NPV of cash flows = $5,000. Using profitability index as the evaluation method, rank the projects in order of preference with the best choice on top.

A company has evaluated several projects using net present value. All projects are similar in amount invested and risk. Rank the projects in the order they should be accepted.

A company is considering an investment opportunity with a cost of $5,000 that will provide future cash flows of $8,000. The flows for the investment for the next 4 years are: $1,000, $1,000, $2,000, and $4,000. Assume a required rate of return of 10%. The NPV is $ _____