The amount of the average investment for a proposed investment of $120,000 in a fixed asset with a useful life of 4 years, straight-line depreciation, no residual value, and an expected total income of $21,600 for the 4 years is

Question 19 options:

A)

$30,000

B)

$21,600

C)

$5,400

D)

$60,000

Question 20 (2 points)

If in evaluating a proposal by use of the net present value method there is an excess of the present value of future cash inflows over the amount to be invested, the rate of return on the proposal exceeds the rate used in the analysis.

Question 20 options:

	A) True
	B) False

Question 21 (2 points)

The management of Zesty Corporation is considering the purchase of a new machine costing $400,000. The company's desired rate of return is 10%. The present value factors for $1 at compound interest of 10% for Years 1 through 5 are 0.909, 0.826, 0.751, 0.683, and 0.621, respectively. In addition to the foregoing information, use the following data in determining the acceptability in this situation:

Year	Operating Income	Net Cash Flow
1	$100,000	$180,000
2	40,000	120,000
3	20,000	100,000
4	10,000	90,000
5	10,000	90,000

The cash payback period for this investment is

Question 21 options:

A)

5 years

B)

4 years

C)

2 years

D)

3 years