Indicate whether each of the following statements is true or false.An ordinary annuity assumes that cash flows occur at the beginning of each period.To say that an investment earns the desired rate of return assumes that all cash flows generated by the investment are reinvested at the desired rate of return.Managers should not use two different methods in evaluating capital investment decisions because different methods generally give different results.Copley Corporation uses a required rate of return of 10% for its capital investment decisions. A particular project had a negative net present value. For this project, the actual rate of return was expected to be more than 10%.The net present value of a capital investment project is calculated by subtracting the present value of expected
cash inflows from the cost of the investment.
What will be an ideal response?
An ordinary annuity assumes that cash flows occur at the beginning of each period. F
To say that an investment earns the desired rate of return assumes that all cash flows generated by the investment are reinvested at the desired rate of return. T
Managers should not use two different methods in evaluating capital investment decisions because different methods generally give different results. F
Copley Corporation uses a required rate of return of 10% for its capital investment decisions. A particular project had a negative net present value. For this project, the actual rate of return was expected to be more than 10%. F
The net present value of a capital investment project is calculated by subtracting the present value of expected cash inflows from the cost of the investment. F
You might also like to view...
A corporation's legal capital
A) is established to protect the corporation's creditors. B) is a requirement established by the SEC to aid in enforcement of regulations. C) is the amount of cash received by the corporation from its shareholders when it originally issues stock. D) allows a corporation to declare dividends of any amount.
The objective of descriptive research is to gather preliminary information that will help define the problem and form hypotheses
Indicate whether the statement is true or false
An employee feels discriminated against by his employer, based on his religion. Who must he approach before filing a lawsuit against the employer? Describe the process
What will be an ideal response?
Maintaining good controls over merchandise inventory ensures that inventory purchases are properly authorized and accounted for by the accounting system
Indicate whether the statement is true or false