Quiz Ch 05 – Defining the Benefit-Cost Ratio
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
What does the benefit-cost ratio represent?
What does the benefit-cost ratio represent?
What does the profitability index represent?
What factors influence the net present value of a project?
What is the likely number of Internal Rate of Returns (IRRs) for the project if the cash flow sign for a project changes two times?
In what way does the modified internal rate of return (MIRR) differ from the internal rate of return (IRR)?
Which investment rule might NOT incorporate all available cash flows in its computations?
In which situation is the profitability index most effectively utilized?
True or false: Expenses related to decommissioning and clean-up in a project are commonly considered insignificant and can usually be disregarded.
True or false: Accounting earnings obtained from a company’s income statement, following generally accepted accounting principles (GAAP), are typically the most appropriate data for determining a project’s NPV.
True or false: The internal rate of return (IRR) is the discount rate that results in a net present value of zero for a project’s cash inflows.