(d) Which of the following will result in the largest dollar amount of money? (a) 5. $100,000 invested at 10% per year, compounded annually. $100,000 invested at 10% per year, compounded quarterly. $100,000 invested at 10% per year, compounded monthly. $100,000 invested at 10% per year, compounded semiannually. (b) (c) 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) (b) (c) (d) 6. Present value index. Internal rate of return. Payback period. Average rate of return. The present value index is computed using which of the following formulas? (a) (b) (c) (d) 7. Investment Amount / Average Rate of Return on Investment. Total Present Value of Net Cash Flows / Investment Amount. Investment Amount / Total Present Value of Net Cash Flows. Total Present Value of Net Cash Flows / Average Rate of Return on Investment. An analysis of a proposal by the net present value method indicated that the present value exceeded the amount to be invested. Which of the following statements best describes the results of this analysis? (a) 8. The proposal is desirable and the rate of return expected from the proposal exceeds the minimum rate used for the analysis. The proposal is desirable and the rate of return expected from the proposal is less than the minimum rate used for the analysis. The proposal is undesirable and the rate of return expected from the proposal is less than the minimum rate used for the analysis. The proposal is undesirable and the rate of return expected from the proposal exceeds the minimum rate used for the analysis. (b) (c) (d)