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A project's net present value, ignoring income taxes, is affected by:

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Question

A project's net present value, ignoring income taxes, is affected by;a- the net book value of an asset that is replaced.;b- the depreciation on an asset that is replaced.;c- the depreciation to be taken on assets used directly on the project.;d- proceeds from the sale of an asset that is replaced.;2-A company has unlimited funds to invest at its discount rate. The company should invest in all projects having;a- an internal rate of return greater than zero.;b- a net present value greater than zero.;c- a simple rate of return greater than the discount rate.;d- a payback period less than the project's estimated life.;3-When the cash flows are the same every period after the initial investment in a project, the payback period is equal to;a- the net present value.;b- the simple rate of return.;c- the factor of the internal rate of return.;d- the payback rate of return.;4-The project profitability index and the internal rate of return;a- will always result in the same preference ranking for investment projects.;b- will sometimes result in different preference rankings for investment projects.;c- are less dependable than the payback method in ranking investment projects.;d- are less dependable than net present value in ranking investment projects;5-A preference decision;a- is concerned with whether a project clears the minimum required rate of return hurdle.;b- comes before the screening decision.;c- is concerned with determining which of several acceptable alternatives is best.;d- All of the above;6-When evaluating a project, the portion of the fixed corporate headquarters expense that would be allocated to the project should be;a- included as a cash outflow on an after-tax basis by multiplying the expense by one minus the tax rate.;b- included as a cash outflow on an after-tax basis by multiplying the expense by the tax rate.;c- included as a cash outflow on a before-tax basis.;d- ignored

 

Paper#26189 | Written in 18-Jul-2015

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