Question
HELP ON THIS PROBLEM AND A-D true false questions really struggling on these last ones! Perkins Corporation is considering several investment proposals, as shown below:
HELP ON THIS PROBLEM AND A-D true false questions really struggling on these last ones!
Perkins Corporation is considering several investment proposals, as shown below:
Investment Proposal | ||||||||||||
A | B | C | D | |||||||||
Investment required | $ | 116,000 | $ | 145,000 | $ | 87,000 | $ | 108,750 | ||||
Present value of future net cash flows | $ | 139,200 | $ | 217,500 | $ | 121,800 | $ | 228,000 | ||||
If the project profitability index is used, the ranking of the projects from most to least profitable would be
TRUE / FALSE
When the net cash inflow is the same every year for a project after the initial investment, the internal rate of return of a project can be determined by dividing the initial investment required in the project by the annual net cash inflow. This computation yields a factor that can be looked up in a table of present values of annuities to find the internal rate of return. true/false
When computing the project profitability index of an investment project, the investment required should exclude any investment made in working capital at the beginning of the project. true/false
When discounted cash flow methods of capital budgeting are used, the working capital required for a project is ordinarily counted as a cash outflow at the beginning of the project and as a cash inflow at the end of the project. true/false
The internal rate of return is the rate of return of an investment project over its useful life. true/false
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