1. | Capital investment analysis is |
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2. | Which of the following is not true of capital investments? |
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3. | Which of the following is a method of analyzing capital investment proposals that ignores present value? |
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4. | Decisions to install new equipment, purchase other businesses, and purchase a new building are examples of |
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5. | The expected average rate of return for a proposed investment of $600,000 in a fixed asset, with a useful life of four years, straight-line Depreciation, no residual value, and an expected total net income of $216,000 for the 4 years, is: |
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6. | An anticipated purchase of equipment for $400,000, with a useful life of 8 years and no residual value, is expected to yield the following annual net incomes and net cash flows:What is the cash payback period? |
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7. | Which of the following is a present value method of analyzing capital investment proposals? |
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8. | Using the following partial table of present value of $1 at compound interest, determine the present value of $25,000 to be received four years hence, with earnings at the rate of 10% a year: |
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9. | The management of Arnold Corporation is considering the purchase of a new machine costing $430,000. The company's desired rate of return is 10%. The present value factors for $1 at compound interest of 10% for 1 through 5 years are 0.909, 0.826, 0.751, 0.683, 0.621, respectively. In addition to the foregoing information, use the following data in determining the acceptability in this situation:The net present value for this investment is: |
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10. | All of the following qualitative considerations may impact upon capital investments analysis except: |
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11. | Which of the following provisions of the Internal Revenue Code can be used to reduce the amount of the income tax expense arising from capital investment projects? |
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12. | Assume in analyzing alternative proposals that Proposal A has a useful life of five years and Proposal B has a useful life of eight years. What is one widely used method that makes the proposals comparable? |
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13. | All of the following are factors that may complicate capital investment analysis except: |
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14. | Capital rationing involves all of the following except: |
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15. | Which of the following factors does not have an impact on the outcome of a capital investment decision? |
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16. | Which of the following is not true of capital investments? |
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17. | The process by which management plans, evaluates, and controls long-term investment decisions involving fixed assets is called: |
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18. | Decisions to install new equipment, replace old equipment, and purchase a new building are examples of |
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19. | Which of the following are two methods of analyzing capital investment proposals that both ignore present value? |
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20. | The expected average rate of return for a proposed investment of $44,000 in a fixed asset, using straight line Depreciation, with a useful life of 4 years, no residual value, and an expected total net income of $12,320 is: |
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21. | An anticipated purchase of equipment for $500,000, with a useful life of 8 years and no residual value, is expected to yield the following annual net incomes and net cash flows:What is the cash payback period? |
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22. | Below is a table for the present value of $1 at Compound interest.Below is a table for the present value of an annuity of $1 at compound interest.Using the tables above, what would be the present value of $15,000 (rounded to the nearest dollar) to be received three years from today, assuming an earnings rate of 6%? |
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23. | Below is a table for the present value of $1 at Compound interest.Below is a table for the present value of an annuity of $1 at compound interest.Using the tables above, if an investment is made now for $20,000 that will generate a cash inflow of $8,000 a year for the next 4 years, what would be the net present value (rounded to the nearest dollar) of the investment, (assuming an earnings rate of 10%)? |
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24. | The management of Arnold Corporation is considering the purchase of a new machine costing $420,000. The company's desired rate of return is 10%. The present value factors for $1 at compound interest of 10% for 1 through 5 years are 0.909, 0.826, 0.751, 0.683, 0.621, respectively. In addition to the foregoing information, use the following data in determining the acceptability in this situation:The present value index for this investment is: |
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25. | All of the following qualitative considerations may impact upon capital investments analysis except: |
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26. | All of the following qualitative considerations may impact upon capital investments analysis except: |
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27. | Inflation is: |
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28. | All of the following are factors that may complicate capital investment analysis except: |
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29. | Capital rationing uses the following measures to determine the funding of projects except: |
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30. | In capital rationing, alternative proposals that survive initial and secondary screening are normally evaluated in terms of: |
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