Quiz Ch 05 – T/F Profitability Index Denominator
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
True or false: The denominator in the calculation of the Profitability Index represents the present value of the investment.
True or false: The denominator in the calculation of the Profitability Index represents the present value of the investment.
True or false: The book value of a project reflects its market valuation.
True or false: The internal rate of return for a project is influenced by its level of risk.
True or false: Soft rationing may be employed as a means to control managerial behavior.
True or false: There is only one unique value for the Internal Rate of Return (IRR) associated with any sequence of cash flows.
True or false: The value additivity property holds for present values.
Hayley has won a lottery and will receive $1,000 per year for the next 30 years. What is the current value of her winnings called?
If you invest $100 in a savings account today, what term refers to the total value of this investment one year from now?
Eunchae invested $2,000 six years ago at 4.5 percent interest and spends all of her interest earnings. What type of interest is she earning on her investment?
True or false: The IRR rule stipulates that corporations should greenlight investment projects (normal) if their internal rate of return surpasses the cost of capital.