Net Present Value and B. Internal Rate

Topics: Net present value, Internal rate of return, Discounted cash flow Pages: 4 (699 words) Published: October 30, 2011
In proper capital budgeting analysis we evaluate incremental a. Accounting income.
b. Cash flow.
c. Earnings.
d. Operating profit.

Capital Budgeting is a part of:
(a)Investment Decision
(b) Working Capital Management
(c) Marketing Management
(d) Capital Structure

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.

The internal rate of return is defined as the:
A. maximum rate of return a firm expects to earn on a project. B. rate of return a project will generate if the project in financed solely with internal funds. C. discount rate that equates the net cash inflows of a project to zero. D. discount rate which causes the net present value of a project to equal zero. E. discount rate that causes the profitability index for a project to equal zero.

Which two methods of project analysis were the most widely used by CEO's as of 1999? A. net present value and payback
B. internal rate of return and payback
C. net present value and average accounting return
D. internal rate of return and net present value
E. payback and average accounting return

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. net present value period.
B. internal return period.
C. payback period.
D. discounted profitability period.
E. discounted payback period.

Capital Budgeting deals with
(a) Long-term Decisions
(b) Short-term Decisions
(c) Both (a) and (b)
(d) Neither (a) nor (b)

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