Question : 71. Frisco Corporation considering two projects, A and B, and it : 1208003

71. Frisco Corporation is considering two projects, A and B, and it has gathered the following estimates for the projects:
  
What is the net present value for project A? 
A. $7,360
B. $6,100
C. $1,260
D. None of the other answers are correct.

72. Frisco Corporation is considering two projects, A and B, and it has gathered the following estimates for the project
  
What is the present value index for project B? 
A. 1.096
B. 1.124
C. .889292
D. .91275

73. York Corporation is considering purchasing equipment that costs $80,000 and is expected to provide the following cash inflows over its five-year useful life:
  
What is the payback period of this investment project (rounded to the nearest year)? 
A. 2 years
B. 3 years
C. 4 years
D. 6 years

74. A capital investment is expected to cost $100,000, have a useful life of 5 years, and provide annual cash inflows of $26,000. Which of the following should be used to determine whether or not the project is an acceptable investment? 
A. Payback period method
B. Unadjusted rate of return method
C. Net present value method
D. All of the other answers are correct.

75. Capital investment decisions involve all of the following, except: 
A. The acquisition of short-term operational assets.
B. Relatively long periods of time and large cash flows.
C. The acquisition of long-term operational assets.
D. None of the other answers are correct.

76. A series of equal cash flows at fixed intervals is termed a(n): 
A. Net cash flow.
B. Lump sum.
C. Annuity.
D. Return on investment.

77. Which method for evaluating capital investment proposals reduces the present value of cash outflows from the present value of cash inflows? 
A. Net present value
B. Internal rate of return
C. Payback method
D. Unadjusted rate of return

78. Which of the following are not present value methods of analyzing capital investment proposals? 
A. Internal rate of return and payback
B. Internal rate of return and net present value
C. Net present value and payback
D. Payback and unadjusted rate of return

79. Which of the following is not a criteria that is used to determine whether a project is acceptable under the net present value method? 
A. If the net present value is equal to zero
B. If the net present value is greater than zero
C. If the net present value is less than zero
D. None of the other answers are correct.

80. Jim Tyler is evaluating a potential capital investment. He has calculated the net present value using a minimum rate of return of 10%. Using this rate, the net present value is negative. What does this tell him about the rate of return expected for the project? 
A. If the net present value is negative; the expected rate of return for the project is less than the 10% minimum or required rate of return.
B. If the net present value is negative; the expected rate of return for the project is greater than the 10% minimum or required rate of return.
C. If the net present value is negative; the expected rate of return for the project is equal to the 10% minimum or required rate of return.
D. None of the other answers are correct.