solution?

Assignment 6 ASSIGNMENT 6 QUESTIONS Enter answers on the Armond Dalton Resources website (www.armonddaltonresources.com). Q-6-1. Which of the following statements best describes the difference between the pay- back period and the internal rate of return on this investment? 1. There are no differences; they are calculated in the same way. 2. The payback period uses accrual basis net operating income, and the internal rate of return ignores the time value of money. percentage. 3. The payback period is measured in years, and the internal rate of return is a 4. The internal rate of return uses accrual basis net operating income, and the payback method uses cash flows. 5. The payback period and internal rate of return focus on cash flows. Q-6-2. Which of the following capital budgeting techniques uses cash flows, rather than accrual net operating income? (Check all that apply.) Payback period. Accounting rate of return. Net present value. Internal rate of return. Q-6-3. Which of the following percentages is similar to a discount rate that is used to cal- culate net present value using the present value tables? (Check all that apply.) Internal rate of return. Minimum required rate of return. Accounting rate of return. Hurdle rate. Q-6-4. If Gatsby lowers its discount rate and all other facts remain the same, what do you expect will happen to the internal rate of return (IRR)? 1. The IRR will increase. 2. The IRR will decrease. 3. The IRR will stay the same. 4. The IRR could increase but will never decrease. 5. The IRR could increase or decrease. Q-6-5. How does the net present value (NPV) of Gatsby's investment in the robotic machine change if the company chooses a more realistic minimum required rate of return such as 4% rather than 6%? 1. The NPV will increase. 2. The NPV will decrease. 3. The NPV will stay the same. 4. The NPV could increase or decrease. 5. The NPV could increase but will never decrease. Questions 67