1) When should the decision of accepting a project be taken?

Only if the net present value of the project is positive.

Only if the net present value of the project is negative.

Only if the net present value of the project is neither positive nor negative.

Both "Only if the net present value of the project is positive" and "Only if the net present value of the project is neither positive nor negative" are correct.

2) The built-in function in Microsoft Excel PV (________) returns a present value for the cash inflows equal to $57,559.70.

(12%, 6, 14000)

(12%, -6, 14000)

(-12%, 6, 14000)

(12%, 6, -14000)

3) A common characteristic found in capital investment evaluation methods that use present values is

no interest rate.

an interest rate.

their ease of use.

None of these choices are correct.

4) Assume that management is evaluating the purchase of a new machine as follows:

Cost of new machine: $800,000

Residual value: $0

Estimated total income from machine: $300,000

Expected useful life: 5 years

The average rate of return on this asset would be

15%.

14%.

13%.

None of these choices are correct.