Question : 61. An anticipated purchase of equipment for $580,000, with a useful : 1246983

 

 

61. An anticipated purchase of equipment for $580,000, with a useful life of 8 years and no residual value, is expected to yield the following annual net incomes and net cash flows: 

Year

Net Income

Net Cash Flow

1

$60,000

$110,000

2

50,000

100,000

3

50,000

100,000

4

40,000

90,000

5

40,000

90,000

6

40,000

90,000

7

40,000

90,000

8

40,000

90,000

 

 

 

What is the cash payback period? A. 5 yearsB. 4 yearsC. 6 yearsD. 3 years

 

62. Which method for evaluating capital investment proposals reduces the expected future net cash flows originating from the proposals to their present values and computes a net present value? A. Net present valueB. Average rate of returnC. Internal rate of returnD. Cash payback

 

63. Which of the following can be used to place capital investment proposals involving different amounts of investment on a comparable basis for purposes of net present value analysis? A. Price-level indexB. Present value factorC. AnnuityD. Present value index

 

64. An analysis of a proposal by the net present value method indicated that the present value of future cash inflows exceeded the amount to be invested. Which of the following statements best describes the results of this analysis? A. The proposal is desirable and the rate of return expected from the proposal exceeds the minimum rate used for the analysis.B. The proposal is desirable and the rate of return expected from the proposal is less than the minimum rate used for the analysis.C. The proposal is undesirable and the rate of return expected from the proposal is less than the minimum rate used for the analysis.D. The proposal is undesirable and the rate of return expected from the proposal exceeds the minimum rate used for the analysis.

 

65. Which method of evaluating capital investment proposals uses the concept of present value to compute a rate of return? A. Average rate of returnB. Accounting rate of returnC. Cash payback periodD. Internal rate of return

 

66. Which of the following is a method of analyzing capital investment proposals that ignores present value? A. Internal rate of returnB. Net present valueC. Discounted cash flowD. Average rate of return

 

67. The methods of evaluating capital investment proposals can be separated into two general groups–present value methods and: A. past value methodsB. straight-line methodsC. cash payback methodsD. methods that ignore present value

 

68. The rate of earnings is 10% and the cash to be received in three years is $10,000. Determine the present value amount, using the following partial table of present value of $1 at compound interest: 

Year

6%

10%

12%

1

.943

.909

.893

2

.890

.826

.797

3

.840

.751

.712

4

.792

.683

.636

 

 

 

 

 A. $13,316B. $6,830C. $7,510D. $8,260

 

69. Using the following partial table of present value of $1 at compound interest, determine the present value of $20,000 to be received four years hence, with earnings at the rate of 10% a year: 

Year

6%

10%

12%

1

.943

.909

.893

2

.890

.826

.797

3

.840

.751

.712

4

.792

.683

.636

 

 

 

 

 A. $13,660B. $12,720C. $15,840D. $10,400

 

70. When several alternative investment proposals of the same amount are being considered, the one with the largest net present value is the most desirable. If the alternative proposals involve different amounts of investment, it is useful to prepare a relative ranking of the proposals by using a(n): A. average rate of returnB. consumer price indexC. present value indexD. price-level index

 

 

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more