QUESTION 17

1. Using the NPV method which factor is not relevant in determining the discount rate?

   		The rate of inflation
   		Risk
   		The number of years the firm has been in business
   		Opportunity cost
   		C and D

1 points

QUESTION 18

1. The decision rule for net present value calculations is:

   		to invest if the NPV is above a hurdle level.
   		to invest in projects with the lowest discount rate.
   		to invest in projects with the highest discount rate.
   		to invest if the NPV is positive.
   		None of the above

QUESTION 19

1. The first step in investment decision making is:

   		analysis of data.
   		selection of a decision rule.
   		collection of data.
   		identification of all investment alternatives.
   		None of the above

1 points

QUESTION 20

1. The accounting rate of return (ARR) method of investment decision-making measures average profit over the period as a percentage of average

   		net cash inflow.
   		net cash flow.
   		investment.
   		opportunity cost.
   		None of the above