00 Which of the following four options is true? 1 points Choices Option 1 Option 2 Option 3 Option 4 Yes Does Consider Does the Time Value Consider of Money Cash Flows No Yes No Yes No No Yes Capital Budgeting Method Payback method Net present value method Internal rate of return method Simple rate of return eBook Print Multiple Choice References Option 1 O O Option 2 Option 3 O Option 4 10 Assume that a company is considering a capital investment project with a four-year time horizon and the following cash flows: points Cost of new equipment Working capital required Annual net cash inflows Maintenance and repairs in third year Salvage value of equipment in fourth year $ 210,000 $ 50,000 $ 100,000 $ 40,000 $ 30,000 Skipped Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided. eBook The working capital will be released at the end of the project and the company's required rate of return is 20%. The net present value of the project is closest to: Print Multiple Choice References O $24.100. $14,200. O $19,900). $40,100. O 11 Assume that an investment provides the following cash inflows over a three-year period: 1 points Year 1 Year 2 $ 4,000 5,000 7,000 $ 16,000 Year 3 Skipped Total Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided. eBook Assuming a discount rate of 16%, what is the present value of these cash inflows? Print Multiple Choice References O $11,650 O $10,850 $9.950 O $11,250 O Ch 13 Assume that you are thinking about starting your own small business. You have made the following estimates regarding this opportunity: 1 points You can rent a location for your business at a cost of $36,000 per year. The equipment costs incurred to start the business would total $330,000. The equipment would have a 5-year useful life and a salvage value of $30,000. Your company's estimated sales per year would equal $350,000 and its variable cost of goods sold would be 30% of sales. Other operating costs would include $60,000 per year in salaries, $4,000 per year for insurance, $25,000 per year for utilities, and a 3% sales commission. Skipped Based on these assumptions you estimate the project's simple rate of return to be 15%. However, after further consideration, you decide to revise your estimated salaries from $60,000 to $66,600-an 11% increase This increase in salaries will cause the simple rate of return to change by how much? eBook Print Multiple Choice References It will decrease by 11%. It will decrease by 5%. O a It will decrease by 2%. It will decrease by 4%. Check my w 15 Assume that a company purchased a new machine for $20,000 that has a salvage value of $3,000 at the end of its useful life of five years. The machine is expected to save the company $6,000 a year in cash operating costs for five years. The company's discount rate is 15%. What is the net present value of this investment opportunity? 1 points Skipped Multiple Choice eBook $1,143 Print O $1.603 References O $1,903 $2,203 O