Question 6 If a company has the capacity to produce either 10,000 units of Product A or 10,000 units of Product B; assuming fixed costs are the same, production restrictions are the same for both products, and the markets for both products are unlimited; the company should commit 100% of its capacity to the product that has the higher contribution margin O True False 1 pts D | Question 7 If the straight-line depreciation method is used, the annual average investment amount used in calculating rate of return is calculated as (beginning book value + ending book value)/2. a) True O False Question 8 Two investments with exactly the same payback periods are always equally valuable to an investor. True False A company is considering a 5-year project. The company plans to invest $60,000 now and it forecasts cash flows for each year of $16,200. The company requires a hurdle rate of 12%. Calculate the internal rate of return to determine whether it should accept this project. Selected factors for a present value of an annuity of 1 for five years are shown below: Interest rate 10% 12% 14% Present value of an annuity of $1 factor for year 5 3.7908 3.6048 3.4331 The project should be accepted The project earns more than 10% but less than 12%. At a hurdle rate of 12%, the The project should be rejected because it earns less than 10%. only 9% is acceptable. Only 10% is acceptable. pro c should be rejected o O