Can you please help me solve these

1.Which one of the following methods of analysis is most applicable to those situations where small dollar, short-term, independent projects are evaluated by low level managerson a daily basis?

A.Net present value.

B.Internal rate of return.

C.Accounting rate of return.

D.Payback.

E.Profitability index.

2.An investment's average net income divided by its average book value defines the average:

A.Net present value.

B.Internal rate of return.

C.Accounting return.

D.Profitability index.

E.Payback period.

3.The payback period is defined as the length of time it requires for an investment to generate sufficient cash flows to recoup:

A.The required rate of return on the investment.

B.The initial cost of the investment.

C.All ofthe initial cost plus the ongoing maintenance costs of the fixed assets required by the investment.

D.Both the initial cost of the investment and the amount needed to provide the required rate of return.

E.The future value of the initial cost of the investment.

4.The payback method:

A.Entails difficult computations.

B.Is prejudiced towards short-term projects.

C.Always applies aten yearcut-off point for cash flows.

D.Adjusts for the risk level inherent in a project.

E.Is generally used only for large projects.

5.The average accounting return (AAR) rule can be best stated as:

A.An investment is acceptable if its AAR is less than a target AAR.

B.An investment is acceptable if its AAR exceeds a target AAR.

C.An investment is acceptable if its AAR exceeds the firm's return on equity (ROE).

D.An investment is acceptable if its AAR is less than the firm's return on assets (ROA).

6.The internal rate of return (IRR) rule can be best stated as:

A.An investment is acceptable if its IRR is exactly equal to its net present value (NPV).

B.An investment is acceptable if its IRR is exactly equal to zero.

C.An investment is acceptable if its IRR is less than the required return, or else it should be rejected.

D.An investment is acceptable if its IRR exceeds the required return, or else it should be rejected.

E.An investment is acceptable if its IRR exceeds its depreciation rate.

7.The profitability index (PI) rule can be best stated as:

A.An investment is acceptable if its PI is greater than one.

B.An investment is acceptable if its PI is less than one.

C.An investment is acceptable if its PI is greater than the internal rate of return (IRR).

D.An investment is acceptable if its PI is less than the net present value (NPV).

E.An investment is acceptable if its PI is less than its payback.

8.The net present value (NPV) rule can be best stated as:

A.An investment should be accepted if, and only if, the NPV is exactly equal to zero.

B.An investment should be rejected if the NPV is positive and accepted if it is negative.

C.An investment should be accepted if the NPV is positive and rejected if it is negative.

D.An investment with greater cash inflows than cash outflows, regardless of when the cash flows occur, will always have a positive NPV and therefore should always be accepted.

E.An investment should be accepted if it equals its depreciation value.

9.Which one of the following statements concerning net present value (NPV) is correct?

A.An investment should be accepted if, and only if, the NPV is exactly equal to zero.

B.An investment should be accepted only if the NPV is equal to the initial cash flow.

C.An investment should be accepted if the NPV is positive and rejected if it is negative.

D.An investment with greater cash inflows than cash outflows, regardless of when the cash flows occur, will always have a positive NPV and therefore should always be accepted.

E.Any project that has positive cash flows for everytime periodafter the initial investment should be accepted.

10.The discounted payback rule can be best stated as:

A.An investment is acceptable if its discounted payback period is greater than some pre-specified number of years.

B.An investment should be accepted if the discounted payback is positive and rejected if it is negative.

C.An investment should be rejected if the discounted payback is positive and accepted if it is negative.

D.An investment is acceptable if its discounted payback period is less than some pre-specified number of years.

11.The payback rule can be best stated as:

A.An investment is acceptable if its calculated payback period is less than some pre-specified number of years.

B.An investment should be accepted if the payback is positive and rejected if it is negative.

C.An investment should be rejected if the payback is positive and accepted if it is negative.

D.An investment is acceptable if its calculated payback period is greater than some pre-specified number of years.

E.An investment is acceptable if its calculated payback period is equal to its deprecation useful life.

12.Which one of the following statements is correct concerning the payback period?

A.An investment is acceptable if its calculated payback period is less than some pre-specifiedperiod of time.

B.An investment should be accepted if the payback is positive and rejected if it is negative.

C.An investment should be rejected if the payback is positive and accepted if it is negative.

D.An investment is acceptable if its calculated payback period is greater than some pre-specifiedperiod of time.

E.An investment should be accepted any time the payback period is less than the discounted payback period, given a positive discount rate.

13.Capital budgeting decisions generally:

A.Have long-term effects on a firm.

B.Are ofshort-duration.

C.Are easy to revise once implemented.

D.Focus solely onwhether or nota particular asset should be purchased.

E.Have minimal effects on a firm's operations.

14.All else equal, the payback period for a project will decrease whenever the:

A.Initial cost increases.

B.Required return for a project increases.

C.Assigned discount rate decreases.

D.Cash inflows are moved forward in time.

E.Duration of a project is lengthened.

15.Which of the following decision rules has the advantage that the information needed for the calculation is readily available?

A.Net present value

B.Internal rate of return

C.Average accounting return

D.Payback period

E.Discounted payback

16.The __________ decision rule is considered the "best" in principle.

A.Internal rate of return.

B.Payback period.

C.Average accounting return.

D.Net present value.

E.Profitability index.

17.Which of the following decision rules is best for evaluating projects for which cash flows beyond a specified point in time, and the time value of money, can both be ignored?

A.Payback.

B.Net present value.

C.Average accounting return.

D.Profitability index.

E.Internal rate of return.

18.An investment's average net income divided by its average book value is the:

A.Net present value.

B.Internal rate of return.

C.Average accounting return.

D.Profitability index.

E.Payback period.

19.The discount rate that makes the net present value of an investment exactly equal to zero is called the:

A.External rate of return.

B.Internal rate of return.

C.Average accounting return.

D.Profitability index.

E.Equalizer.

20.The discount rate that makes the net present value of investment exactly equal to zero is the:

A.Payback period.

B.Internal rate of return.

C.Average accounting return.

D.Profitability index.

E.Discounted payback period.

21.The present value of an investment's future cash flows divided by its initial cost is the:

A.Net present value.

B.Internal rate of return.

C.Average accounting return.

D.Profitability index.

E.Payback period.

22.The process of valuing an investment by determining the present value of its future cash flows is called (the):

A.Constant dividend growth model.

B.Discounted cash flow valuation.

C.Average accounting valuation.

D.Expected earnings model.

E.Capital Asset Pricing Model.

23.Average accounting return is defined as:

A.Average net income divided by average book value.

B.Average cash inflow divided by average cash outflow.

C.Average sales divided by average total assets.

D.Average net income divided by average project cost.

E.Average cash inflow divided by average book value.

24.Which of the followingis considered to bea redeeming feature of average accounting return analysis?

A.It incorporates time value of money.

B.Estimation of the appropriatecutoffrate is straightforward and easy.

C.Calculation relies on net income and not cash flows or asset values.

D.Calculation relies on book values and not market values or cash flows.

E.It is relatively easy to calculate.

25.The purchase of new equipment is classified as a _____ decision.

A.Capital structure.

B.Capital budgeting.

C.Capital growth.

D.Working capital.

E.Capital return.

26.The essence of _________________ is determining whether a proposed investment or project will generate positive wealth for the owners of the firm once it is in place.

A.Capital budgeting.

B.Internal rate of return analysis.

C.Cash flow analysis.

D.Payback analysis.

E.The profitabilityindex.

27.The net present value of a project will increase when the:

A.Discount rate increases.

B.Initial investment increases in amount.

C.Cash inflows are received sooner.

D.Estimated salvage value of the equipment is lowered.

E.Tax rate applied to the project's profits is increased.

28.An advantage of the payback method is its:

A.Time value of money considerations.

B.Application of readily available accounting data.

C.Cut-off point.

D.Long-term perspective.

E.Simplicity.

29.Generally, the most difficult part of utilizing the net present value concept is:

A.Determining the initial cash outflow required to start a project.

B.Computing the net present value once the discount rate and cash flows are determined.

C.Determining whether the discount rate used is higher or lower than the internal rate of return.

D.Estimating the future cash flows given the initial investment in the project.

E.Making the accept/reject decision once the net present value is computed.

30.The internal rate of return is:

A.More reliable as a decision making tool than net present value whenever you are considering mutually exclusive projects.

B.Equivalent to the discount rate that makes the net present value equal to one.

C.Difficult to compute without the use of either a financial calculator or a computer.

D.Dependent upon the interest rates offered in the marketplace.

E.A better methodology than net present value when dealing with unconventional cash flows.

31.The length of time needed to recover the initial investment once time value of money is considered is called the:

A.Discounted payback period.

B.Average accounting return period.

C.Discounted net present value period.

D.Payback period.

E.Internal time interval.

32.Which of the following is a correct statement?

A.The IRRis considered to bethe most important project analysis technique.

B.The AAR is considered preferable to the PI.

C.Discounted payback analysis requires use of a discount rate.

D.It is reasonable to use IRR toanalyzemutually exclusive investments.

E.Regular payback analysis is preferable to discounted payback analysis.

33.From a finance perspective, discounted paybackis considered to bea superior method of analysis as compared to payback. Why then, is discounted payback used less frequently than payback?

A.Discounted payback applies only to long-term projects.

B.Discounted payback is more difficult to compute and explain.

C.Discounted payback is based on net income rather than cash flows.

D.Discounted payback requires knowledge of a project's internal rate of return.

E.Discounted payback is liquidity biased where payback is not.

34.A manager will prefer the IRR rule over the NPV rule if the manager:

A.Prefers to talk in terms of rates of return.

B.Can accurately forecast future cash flows.

C.Dislikes the discounted payback analysis.

D.Also prefers use of payback analysis.

E.Is considering mutually exclusive projects.

35.The internal rate of return for a project will increase if:

A.The initial cost of the project can be reduced.

B.The total amount of the cash inflows is reduced.

C.Each cash inflow is moved such that it occurs one year later than originally projected.

D.The required rate of return is reduced.

E.The salvage value of the project is omitted from the analysis.

36.The difference between the market value of an investment and its cost is the:

A.Net present value.

B.Internal rate of return.

C.Payback period.

D.Profitability index.

E.Discounted payback period.

37.The difference between the present value of an investment and its cost is the:

A.Net present value.

B.Internal rate of return.

C.Payback period.

D.Profitability index.

E.Discounted payback period.

38.The length of time required for an investment to generate cash flows sufficient to recover the initial cost of the investment is called the:

A.Net present value.

B.Internal rate of return.

C.Payback period.

D.Profitability index.

E.Discounted cash period.

39.The length of time required for an investment's discounted cash flows to equal its initial cost is the:

A.Net present value.

B.Internal rate of return.

C.Payback period.

D.Profitability index.

E.Discounted payback period.

40.Your firm's CFO presents you with two capital budgeting analyses: one that involves buying a new delivery truck to replace the existing truck and one that involves the purchase of a three-ton metal stamping press to replace the existing press on the plant floor. This is an example of a decision involving _______________.

A.Mutually exclusive projects.

B.Crossover projects.

C.Payback projects.

D.Independent projects.

E.Working capital projects.