Capital Budgeting Decisions: Selections and Payback Periods

Unit 8 Chapter 12 Interactive Presentation(ACCT 211H) 1.Which of the following is NOT one of the two broad categories of capital budgeting decisions? Selection decisions 2.An investment proposal with an initial investment of $100,000 generates annual net cash inflow of $20,000 for a period of 10 years. The project has a net present value of $10,000. What is this investment proposal's payback period? 5 years 3.YearInvestmentCash Inflow 1$ 14,000$ 6,000 24,000 34,0000 48,000 59,000 612,000 72,000 Given here are the cash flows of an investment under consideration. What is the payback period of this investment? 4 years 4.Which of the following ignores the time value of money? Payback Period 5.identify the simplifying assumptions usually made in net present value analysis. The inflow and outflow of cash other than initial investment occur at the end of each period. 6.A negative net present value indicates that the project's return isless than the minimum required rate of return 7.Project Marvel is a five-year project. The project has a total cash inflow of $350,000. The present value of such inflows is $275,000. The project requires an initial investment of $200,000 and additional working capital of $25,000. What is the net present value of the project? $50,000 8.Which of the following is the term used to describe the discount rate at which the present value of a project's cash inflows will equal the present value of its cash outflows? Internal Rate of Return