【正文】 sed investments by using the net present value criterion.Section: Topic: Discounted cash flow valuation10.Which one of the following indicates that a project is expected to create value for its owners?A.Profitability index less than B.Payback period greater than the requirementC.Positive net present valueD.Positive average accounting rate of returnE.Internal rate of return that is less than the requirementRefer to section .Bloom39。s: ComprehensionDifficulty: BasicLearning Objective: 0804 Evaluate proposed investments by using the net present value criterion.Section: Topic: Net present value11.The net present value:A.decreases as the required rate of return increases.B.is equal to the initial investment when the internal rate of return is equal to the required return.C.method of analysis cannot be applied to mutually exclusive projects.D.is directly related to the discount rate.E.is unaffected by the timing of an investment39。s cash flows.Refer to section .Bloom39。s: ComprehensionDifficulty: IntermediateLearning Objective: 0804 Evaluate proposed investments by using the net present value criterion.Section: Topic: Net present value12.Which one of the following is generally considered to be the best form of analysis if you have to select a single method to analyze a variety of investment opportunities?A.PaybackB.Profitability indexC.Accounting rate of returnD.Internal rate of returnE.Net present valueRefer to section .Bloom39。s: ComprehensionDifficulty: BasicLearning Objective: 0804 Evaluate proposed investments by using the net present value criterion.Section: Topic: Net present value13.Which one of the following statements is correct?A.The net present value is a measure of profits expressed in today39。s dollars.B.The net present value is positive when the required return exceeds the internal rate of return.C.If the initial cost of a project is increased, the net present value of that project will also increase.D.If the internal rate of return equals the required return, the net present value will equal zero.E.Net present value is equal to an investment39。s cash inflows discounted to today39。s dollars.Refer to section .Bloom39。s: ComprehensionDifficulty: IntermediateLearning Objective: 0804 Evaluate proposed investments by using the net present value criterion.Section: Topic: Net present value15.Which one of the following indicates that a project should be rejected?A.Average accounting return that exceeds the requirementB.Payback period that is shorter than the requirement periodC.Positive net present valueD.Profitability index less than E.Internal rate of return that exceeds the required returnRefer to section .Bloom39。s: ComprehensionDifficulty: BasicLearning Objective: 0806 Calculate the profitability index and understand its relation to net present value.Section: Topic: Profitability index16.Which one of the following indicators offers the best assurance that a project will produce value for its owners?A.PI equal to zeroB.Negative rate of returnC.Positive AARD.Positive IRRE.Positive NPVRefer to section .Bloom39。s: KnowledgeDifficulty: BasicLearning Objective: 0804 Evaluate proposed investments by using the net present value criterion.Section: Topic: Net present value36.Which one of the following will occur when the internal rate of return equals the required return?A.The average accounting return will equal .B.The profitability index will equal .C.The profitability index will equal 0.D.The net present value will equal the initial cash outflow.E.The profitability index will equal the average accounting return.Refer to section .Bloom39。s: ComprehensionDifficulty: IntermediateLearning Objective: 0806 Calculate the profitability index and understand its relation to net present value.Section: Topic: Profitability index37.An investment has conventional cash flows and a profitability index of . Given this, which one of the following must be true?A.The internal rate of return exceeds the required rate of return.B.The investment never pays back.C.The net present value is equal to zero.D.The average accounting return is .E.The net present value is greater than .Refer to section .Bloom39。s: ComprehensionDifficulty: IntermediateLearning Objective: 0806 Calculate the profitability index and understand its relation to net present value.Section: Topic: Profitability index38.Which one of the following is true if the managers of a firm only accept projects that have a profitability index greater than ?A.The firm should increase in value each time the firm accepts a new project.B.The firm is most likely steadily losing value.C.The price of the firm39。s stock should remain constant.D.The net present value of each new project is zero.E.The internal rate of return on each new project is zero.Refer to section .Bloom39。s: ComprehensionDifficulty: IntermediateLearning Objective: 0806 Calculate the profitability index and understand its relation to net present value.Section: Topic: Profitability index39.If a project with conventional cash flows has a profitability index of , the project will:A.never pay back.B.have a negative net present value.C.have a negative internal rate of return.D.produce more cash inflows than outflows in today39。s dollars.E.have an internal rate of return that equals the required return.Refer to section .Bloom39。s: ComprehensionDifficulty: IntermediateLearning Objective: 0806 Calculate the profitability index and understand its relation to net present value.Section: Topic: Profitability index40.The profitability index reflects the value created per dollar:A.invested.B.of sales.C.of net ine.D.of taxable ine.E.of shareholders39。 equity.Refe