FRL 9

A project has an initial cost of $27,400 and a market value of $32,600. What is the difference between these two values called?

Which one of the following methods of project analysis is defined as computing the value of a project based upon the present value of the project's anticipated cash flows?

The length of time a firm must wait to recoup the money it has invested in a project is called the:

The length of time a firm must wait to recoup, in present value terms, the money it has in invested in a project is referred to as the:

A project's average net income divided by its average book value is referred to as the project's average:

The internal rate of return is defined as the:

You are viewing a graph that plots the NPVs of a project to various discount rates that could be applied to the project's cash flows. What is the name given to this graph?

There are two distinct discount rates at which a particular project will have a zero net present value. In this situation, the project is said to:

If a firm accepts Project A it will not be feasible to also accept Project B because both projects would require the simultaneous and exclusive use of the same piece of machinery. These projects are considered to be:

The present value of an investment's future cash flows divided by the initial cost of the investment is called the:

A project has a net present value of zero. Which one of the following best describes this project?

Which one of the following will decrease the net present value of a project?

Which one of the following methods determines the amount of the change a proposed project will have on the value of a firm?

If a project has a net present value equal to zero, then:

Rossiter Restaurants is analyzing a project that requires $180,000 of fixed assets. When the project ends, those assets are expected to have an aftertax salvage value of $45,000. How is the $45,000 salvage value handled when computing the net present value of the project?

Which one of the following increases the net present value of a project?

Net present value:

Which one of the following is a project acceptance indicator given an independent project with investing type cash flows?

Why is payback often used as the sole method of analyzing a proposed small project?

Which of the following are advantages of the payback method of project analysis?

Samuelson Electronics has a required payback period of three years for all of its projects. Currently, the firm is analyzing two independent projects. Project A has an expected payback period of 2.8 years and a net present value of $6,800. Project B has an expected payback period of 3.1 years with a net present value of $28,400. Which projects should be accepted based on the payback decision rule?

A project has a required payback period of three years. Which one of the following statements is correct concerning the payback analysis of this project?

A project has a discounted payback period that is equal to the required payback period. Given this, which of the following statements must be true?

Which one of the following statements related to payback and discounted payback is correct?

Applying the discounted payback decision rule to all projects may cause:

Which one of the following correctly applies to the average accounting rate of return?

Which one of the following is an advantage of the average accounting return method of analysis?

Which of the following are considered weaknesses in the average accounting return method of project analysis?

Which one of the following statements related to the internal rate of return (IRR) is correct?

The internal rate of return:

Tedder Mining has analyzed a proposed expansion project and determined that the internal rate of return is lower than the firm desires. Which one of the following changes to the project would be most expected to increase the project's internal rate of return?

The internal rate of return is:

Which of the following statements related to the internal rate of return (IRR) are correct?

Douglass Interiors is considering two mutually exclusive projects and have determined that the crossover rate for these projects is 11.7 percent. Project A has an internal rate of return (IRR) of 15.3 percent and Project B has an IRR of 16.5 percent. Given this information, which one of the following statements is correct?

You are comparing two mutually exclusive projects. The crossover point is 12.3 percent. You have determined that you should accept project A if the required return is 13.1 percent. This implies you should:

Graphing the crossover point helps explain:

A project with financing type cash flows is typified by a project that has which one of the following characteristics?

Which of the following statements generally apply to the cash flows of a financing type project?

Which one of the following statements is correct in relation to independent projects?

The profitability index is most closely related to which one of the following?

Roger's Meat Market is considering two independent projects. The profitability index decision rule indicates that both projects should be accepted. This result most likely does which one of the following?

Which one of the following methods of analysis provides the best information on the cost-benefit aspects of a project?

When the present value of the cash inflows exceeds the initial cost of a project, then the project should be:

Which one of the following is the best example of two mutually exclusive projects?

Southern Chicken is considering two projects. Project A consists of creating an outdoor eating area on the unused portion of the restaurant's property. Project B would use that outdoor space for creating a drive-thru service window. When trying to decide which project to accept, the firm should rely most heavily on which one of the following analytical methods?

Mutually exclusive projects are best defined as competing projects which:

The final decision on which one of two mutually exclusive projects to accept ultimately depends upon which one of the following?

Isaac has analyzed two mutually exclusive projects of similar size and has compiled the following information based on his analysis. Both projects have 3- year lives. Isaac has been asked for his best recommendation given this information. His recommendation should be to accept:

Which one of the following statements would generally be considered as accurate given independent projects with conventional cash flows?

In actual practice, managers frequently use the:

Kristi wants to start training her most junior assistant, Amy, in the art of project analysis. Amy has just started college and has no experience or background in business finance. To get her started, Kristi is going to assign the responsibility for all projects that have initial costs less than $1,000 to Amy to analyze. Which method is Kristi most apt to ask Amy to use in making her initial decisions?

Which two methods of project analysis were the most widely used by CEO's as of 1999?

Which two methods of project analysis are the most biased towards short-term projects?

Western Beef Exporters is considering a project that has an NPV of $32,600, an IRR of 15.1 percent, and a payback period of 3.2 years. The required return is 14.5 percent and the required payback period is 3.0 years. Which one of the following statements correctly applies to this project?

You are considering a project with conventional cash flows and the following characteristics:Which of the following statements is correct given this information?

Which of the following are definite indicators of an accept decision for an independent project with conventional cash flows?