Quiz Ch 05 – Investment Rules with Value Additivity Property
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
Which investment rule possesses the value additivity property?
Which investment rule possesses the value additivity property?
Which approach for assessing capital investment projects considers the concept of the time value of money?
What is the Net Present Value (NPV) of an investment project (normal project) when its Internal Rate of Return (IRR) is equal to the cost of capital?
In which situation is the profitability index most effectively utilized?
What could a firm do with $100 million in excess cash?
What is the acceptance criterion for projects under the payback period rule?
What is the most efficient method for computing the internal rate of return (IRR) of a project?
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.