Question
21. When several alternative investment proposals of the same amount are being considered, the one with the largest net present value is the most desirable.
21. 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 return index
b. consumer price index
c. present value index
d. price-level index
22. By converting dollars to be received in the future into current dollars, the present value methods take intoconsideration that money
a. has an international rate of exchange
b. is the language of business
c. is the measure of assets, liabilities, and stockholders' equity on financial statements
d. has a time value
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