Question
help with these last couple I cant figure out! True/False : a. When the net cash inflow is the same every year for a project
help with these last couple I cant figure out!
True/False :
a. 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
b. 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
c. 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
d. The internal rate of return is the rate of return of an investment project over its useful life. true/false
e. In calculating the "investment required" for the project profitability index, the amount invested should not be reduced by any salvage recovered from the sale of old equipment. True/False
f. In the payback method, depreciation is added back to net operating income when computing the annual net cash flow. True/False
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