ch9 rev answers

951 WordsDec 27, 20144 Pages
1. 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? A. net present value B. internal return C. payback value D. profitability index E. discounted payback 3. The length of time a firm must wait to recoup the money it has invested in a project is called the: A. internal return period. B. payback period. C. profitability period. D. discounted cash period. E. valuation period. 5. A project's average net income divided by its average book value is referred to as the project's average: A. net present value. B. internal rate of return. C. accounting return. D. profitability index. E. payback period. 6. The internal rate of return is defined as the: A. maximum rate…show more content…
Cart sales are expected to be $3,600 a year for three years. After the three years, the cart is expected to be worthless as the expected life of the refrigeration unit is only three years. What is the payback period? A. 1.48 years B. 1.67 years C. 1.82 years D. 1.95 years E. 2.00 years Payback period = $6,000/$3,600 = 1.67 years 76. A project has an initial cost of $6,500. The cash inflows are $900, $2,200, $3,600, and $4,100 over the next four years, respectively. What is the payback period? A. 1.73 years B. 2.51 years C. 2.94 years D. 3.51 years E. 3.94 years 79. Scott is considering a project that will produce cash inflows of $2,100 a year for 4 years. The project has a 12 percent required rate of return and an initial cost of $5,000. What is the discounted payback period? A. 2.97 years B. 3.11 years C. 3.26 years D. 4.38 years E. never 90. You are analyzing a project and have gathered the following data: Based on the internal rate of return of _____ percent for this project, you should _____ the project. A. 14.67; accept B. 17.91; accept C. 14.67; reject D. 17.91; reject E. 18.46; reject 91. You are analyzing a project and have gathered the following data: Based on the net present value of _____, you should _____ the project. A. -$15,030.75; reject B. -$12,995.84; reject C. -$9,283.60; accept D. $9,283.60; accept E. $12,995.84; accept 92. You are analyzing a project and have gathered the

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