Knowledge Check 01 Which of the following is NCT a category for capital budgeting decisions? Selection decisions Screening decisions Preference decisions Knowledge Check 01 An investment proposal with an initial investment of $100,000 generates annual net cash inflow of $20,000 for a period of 10 years. The project has a net present value of $10,000. What is this investment proposal's payback period? 10 years 5 years 2 years 3 years Knowledge Check 01 Which of the following ignores the time value of money? Net Present Value Internal Rate of Return Payback Period Profitability Index Knowledge Check 01 Identify the simplifying assumptions usually made in net present value analysis. (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) ?All cash flows other than the initial investment occur at the end of periods. All cash flows generated by the investment project are immediately reinvested at a rate of return greater than the discount rate. All cash flows generated by the investment project are immediately reinvested at a rate of return equal to the discount rate. All cash flows occur at the beginning of the periods. The time value of money is ignored when evaluating investment proposals under the net present value analysis. Knowledge Check 01 A negative net present value indicates that the project's return is greater than the minimum required rate of return equal to the minimum required rate of return less than the minimum required rate of return cannot determine