7. If project A has a lower payback period than project B, this may indicate that...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
7. If project A has a lower payback period than project B, this may indicate that project A may have a A) lower NPV and be less profitable. higher NPV and be less profitable. higher NPV and be more profitable. D) lower NPV and be more profitable. B) C) 8. The cash payback technique A) B) C) D) considers cash flows over the life of a project. cannot be used with uneven cash flows. is superior to the net present value method. may be useful as an initial screening device. 9. If a payback period for a project is greater than its expected useful life, the A) project will always be profitable. B) entire initial investment will not be recovered. C) project would only be acceptable if the company's cost of capital was low. D) project's return will always exceed the company's cost of capital. 10. A disadvantage of the cash payback technique is that it A) ignores obsolescence factors. B) ignores the cost of an investment. C) is complicated to use. D) ignores the time value of money. 7. If project A has a lower payback period than project B, this may indicate that project A may have a A) lower NPV and be less profitable. higher NPV and be less profitable. higher NPV and be more profitable. D) lower NPV and be more profitable. B) C) 8. The cash payback technique A) B) C) D) considers cash flows over the life of a project. cannot be used with uneven cash flows. is superior to the net present value method. may be useful as an initial screening device. 9. If a payback period for a project is greater than its expected useful life, the A) project will always be profitable. B) entire initial investment will not be recovered. C) project would only be acceptable if the company's cost of capital was low. D) project's return will always exceed the company's cost of capital. 10. A disadvantage of the cash payback technique is that it A) ignores obsolescence factors. B) ignores the cost of an investment. C) is complicated to use. D) ignores the time value of money.
Expert Answer:
Answer rating: 100% (QA)
7 Pay back period is the time required for a project to return its investment The shorter the paybac... View the full answer
Related Book For
Fundamentals Of Financial Management
ISBN: 9780273713630
13th Revised Edition
Authors: James Van Horne, John Wachowicz
Posted Date:
Students also viewed these accounting questions
-
If project A has an expected value of net present value of $200 and a standard deviation of $400, is it more risky than project B, whose expected value is $140 and standard deviation is $300? Explain.
-
Why is the net present value method generally preferred over the internal rate of return method?
-
Why is the net present value method of investment appraisal considered to be theoretically superior to other methods that are found in practice?
-
Calculate the investment return, BAR, and ALPHA of the following investment, all over one year. Market return .12 or 12% investment in Tesla stock, $15000 , then sold at end of year for $32000, bet...
-
Venetian Company has two production departments, Fabricating and Assembling. At a department managers meeting, the controller uses flexible budget graphs to explain total budgeted costs. Separate...
-
Balance this three-column account. What function does the Post. Ref. column serve? When will Account 111 be used in the journalizing and posting process? Name: Cash Account No. 111 DR or Date 2012...
-
37 Use divisibility rules to determine if each of the following is divisible by 2 .
-
The following data are the actual results for Marvelous Marshmallow Company for October. Actual output ............. 9,000 cases Actual variable overhead .......... $405,000 Actual fixed overhead...
-
Heather has recently graduated from college and has landed her first job that grosses approximately $35 000 a year. She is extremely excited because the salary sounds like a huge amount of money. She...
-
Determine what price and quantity would be produced if the bakery has no market power or private information. What is Tims profit if he can sell a perfectly competitive number of goods? What price...
-
(a) / (4) Evaluate improper integrals: 1 dx (b) ye -3y dy. 3x - 1 (5) Determine if the integral is convergent/divergent using comparison test: (a) 1 dx x - ln x (b) | x+1 x5 - x dx. Notice that (b)...
-
True or False. The Laplace transform of 1 is \(\frac{1}{s}\).
-
Determine the steady state response of the mass of a spring-mass-damper system subjected to a harmonic base excitation, \(y(t)\), for the following data: \(m=1 \mathrm{~kg}, c=50...
-
While Virgin Australia suffered financial turmoil during the COVID-19 pandemic and associated shutdowns of air travel, by the start of 2022 it was forecasting a return to pre-bankruptcy volumes of...
-
In a continuous casting machine, the billet moves at a rate of \(\mathrm{m} / \mathrm{s}\). The hot billet is exposed to an ambient temperature of \(T_{a}\). Set up an equation to find the...
-
The income groups for a sample of city residents are listed. Determine the level of measurement of the data set. Explain. Low Middle High
-
Innovation is the act of introducing something new or something newly introduced. Discuss.
-
Interest Compounded Annually. When P dollars is invested at interest rate i, compounded annually, for t years, the investment grows to A dollars, where A = P(1 + i) t . Trevor's parents deposit $7800...
-
Herb I. Vore Hydroponics Corporation wishes to achieve a 35 percent increase in sales next year. Sales last year were $30 million, and the company has equity capital of $12 million. It intends to...
-
The Shelby Gaming Manufacturing Company has experienced a severe cash squeeze and needs $200,000 over the next 90 days. The company has already pledged its receivables in support of a loan. However,...
-
Why is it that so many acquisition opportunities look good before the merger but later prove to be "dogs"?
-
Alexa Inc. recorded the following deferred tax amounts. If the company had current tax expense of \(\$ 26,000\) in 2020 , determine total income tax expense for 2020. Deferred tax liability Deferred...
-
Aquafena Inc. recognized taxable income of \(\$ 100,000\) for the year ended December 31, 2020. Aquafena calculated a deferred tax asset and a deferred tax liability of \(\$ 12,000\) and \(\$...
-
Assuming the same information from Brief Exercise 18-21, record the income tax journal entry on December 31, 2020. Assume zero beginning balances in deferred tax accounts. Exercise 18-21 On December...
Study smarter with the SolutionInn App