The most widely used capital budgeting technique is:
A) the payback period.
B) net present value.
C) internal rate of return.
D) the profitability index.
E) modified internal rate of return.
B
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GameTech International Inc engages in the design, development, and marketing of interactive electronic bingo systems primarily in the United States. The company has plans to enter developing markets such as Brazil and India
TechToys, GameTech's major competitor has already started operations in India. GameTech decides to delay its entry to India and to closely observe TechToys' operations in India. What is the possible rationale behind this delaying decision?
Appraisal rights:
a. belong to dissenting shareholders. b. can be exercised by a target company any time before acquisition. c. allow a target company to get a fair valuation of their assets before sale. d. always give all shareholders the fair market value of their shares.
Jeremy and Gladys own a cabin in Sun Valley, Idaho, which they rented for 30 days. They also used the cabin with their family and friends for the ski season for 45 days. Their income and expenses were as follows: rental income $4,000, mortgage interest $3,000, property taxes $2,200, utilities $400, maintenance $400, and depreciation $4,800. How much depreciation expense can they deduct on Schedule E for the cabin? Use the IRS method for allocation of expenses.
A. $2,400 B. $0 C. $4,800 D. $1,600
A machine that costs $280,000 would be depreciated using the straightline method by a leasing firm over a period of 3 years. Both the book value and the market value would be zero at the end of the 3 years. Both the lessor and the lessee have a tax rate of 21 percent. What is the NPV of the lease relative to the purchase to the lessor if the applicable pretax cost of borrowing is 7 percent and the lease payments are set at $102,100 annually for 3 years?
A) ?$1,025.58 B) ?$9,658.92 C) $411.67 D) $882.09 E) $0