Question : 1. The time value of money concept focuses on: A. revenues alone.B. expenses alone.C. cash : 1291729

1. The time value of money concept focuses on: 
A. revenues alone.
B. expenses alone.
C. cash flows.
D. net income.

2. Which of the following is classified as a capital investment decision? 
A. Purchase of a building
B. Purchase of inventory
C. Paying interest on bonds issued
D. Purchase of a 6-month treasury bill

3. Which of the following statements is true regarding the concept of the time value of money? 
A. A dollar paid today is worth the same as a dollar paid in the future.
B. A dollar received today is worth the same as a dollar received in the future.
C. A dollar received today is worth more than a dollar received in the future.
D. A dollar received today is worth less than a dollar received in the future.

4. A quantitative analysis of capital investment decisions should consider: 
A. accrued revenues.
B. accrued expenses.
C. accounting net income.
D. time value of money.

5. Which of the following is not a typical cash outflow associated with a capital investment? 
A. Repairs and maintenance needed for purchased equipment
B. Additional operating costs resulting from the capital investment
C. Salvage value received when the newly purchased equipment is sold
D. Purchase price of new equipment

6. When using the NPV method, the interest rate used to discount cash flows shouldnot be thought of as the: 
A. hurdle rate.
B. internal rate of return.
C. minimum required rate of return.
D. discount rate.

7. Which of the following statements is false regarding the interest rate used in NPV calculations? 
A. Some companies use their cost of capital as the discount rate.
B. The interest rate used may be adjusted for uncertainty.
C. It should be equal to the maximum required rate of return needed to make the investment profitable.
D. The interest rate used may be higher or lower than the investment’s actual internal rate of return.

8. If an investment’s net present value is positive, then: 
A. The investment provides a return greater than the discount rate.
B. The investment provides a return less than the discount rate.
C. The present value of the cash outflows must have been greater than the present value of the cash inflows.
D. The investment should be deemed as unacceptable.

9. When using the NPV method for a particular investment decision, if the present value of all cash inflows is greater than the present value of all cash outflows, then: 
A. the discount rate used was too high.
B. the investment provides an actual rate of return greater than the discount rate.
C. the investment provides an actual rate of return equal to the discount rate.
D. the discount rate was too low.

10. When using the NPV method for a particular investment decision, if the present value of the cash inflows is equal to the present value of the cash outflows, then: 
A. the discount rate used was too high.
B. the investment should not be made.
C. the investment has an actual rate of return of zero percent.
D. the discount rate is equal to the internal rate of return.