1. QUESTION 5

   If the net present value analysis of a project resulted in a positive value and the company did not accept the project, it could be assumed that:

   		qualitative factors outweigh the benefit of the investment.
   		the return is greater than that required by the company.
   		the net initial investment cannot be recovered.
   		all of the above.

   1 points

   QUESTION 6

   In capital investment decision-making PV stands for:

   		Payback value.
   		Profit vesting.
   		Present value.
   		Purchasing value.

   1 points

   QUESTION 7

   The decision rule for the accounting rate of return method of assessing investment projects is to accept all projects with:

   		the highest return.
   		the highest return subject to a minimum required return.
   		a positive return.
   		none of the above.

   1 points

   QUESTION 8

   The following data was given for three projects being considered by Manosteel Ltd. Only one project can be accepted due to funding limitations.

   Project	IRR	NPV	Payback
   A	20%	$18,000	7 yrs
   B	18%	$100,000	5 yrs
   C	15%	$95,000	10 yrs

   Which project is the best given that Manosteel's required rate of return is 14%?

   		Project A
   		Project B
   		Project C
   		All projects should be accepted, as all have a positive Net Present Value and an Internal Rate of Return greater than the required rate of return.

1