QUESTION 9

1. Which of the following would be a reason for preferring $100 now rather than $100 in one year's time?

   		interest lost
   		the effects of inflation
   		risk
   		all of the above

1 points

QUESTION 10

1. Which of these is a disadvantage of the payback method of investment evaluation?

   		It disregards the time value of money.
   		It disregards the post payback period cash flows.
   		It is based on cash flows.
   		A and B

1 points

QUESTION 11

1. Actol Ltd, a printing business, intends purchasing a new computerised printing machine for $800,000. The annual cash flows from the new machine are expected to be $150,000 per year. The machine has an eight-year useful life. The payback period is:

   		6 years.
   		5.33 years.
   		5 years.
   		8 years.

1 points

QUESTION 12

1. If the Net Present Value of a project is $1,000 after using a discount rate of 8%, then one can conclude that the Internal Rate of Return is:

   		less than 8%.
   		between 8% and 10%.
   		8%.
   		greater than 8%.