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BMAL 590 ACCOUNTING EXAM QUESTIONS AND ANSWERS WIT COMPLETE SOLUTIONS 100% GUARANTEED PASS
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BMAL 590 ACCOUNTING EXAM QUESTIONS AND ANSWERS WIT COMPLETE SOLUTIONS 100% GUARANTEED PASS Decisions to install new equipment, replace old equipment, and purchase or construct a new building are examples of Capital investment analysis Which of the following are present value methods of analyzing...

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  • October 7, 2024
  • 10
  • 2024/2025
  • Exam (elaborations)
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  • bmal 590 accounting exam questions and answers wit

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BMAL 590 ACCOUNTING EXAM QUESTIONS AND ANSWERS WIT

COMPLETE SOLUTIONS 100% GUARANTEED PASS

Decisions to install new equipment, replace old equipment, and purchase or construct a new building

are examples of


Capital investment analysis


Which of the following are present value methods of analyzing capital investment proposals?


Net present value and internal rate of return


By converting dollars to be received in the future into current dollars, the present value methods take

into consideration that money


has a time value


The primary advantages of the average rate of return method are its ease of computation and the fact

that


it emphasizes the amount of income earned over the life of the proposal


Which of the following can be used to place capital investment proposals involving different amounts

of investment on a comparable basis for purposes of net present value analysis?


Present value index


An analysis of a proposal by the net present value method indicated that the present value exceed the

amount to be invested. Which of the following statements best describe the results of this analysis?

, The proposal is desirable and the rate of return expected from the proposal exceeds the minimum rate

used for the analysis


In general, present value methods of analyzing capital investments are more desirable than methods

ignoring present value because


The present value methods consider that a dollar today is worth more than a dollar in the future due to

the potential earning power of that dollar


Which method of evaluating capital investment proposals uses the concept of present value to

compute a rate of return?


Internal rate of return


When several alternative investment proposals of the same amount are being considered, the one

with the largest net present value is the most desirable. If the alternative proposal involve different

amounts of investment, it is useful to prepare a relative ranking of the proposals by using a(n)


Present value index


Which method of evaluating capital investment proposals uses present value concepts to compute the

rate of return from the net cash flows expected from capital investment proposals?


Internal rate of return


The present value index is computed using which of the following formulas?


Total present value of net cash flow/Amount to be invested


Which of the following is a present value method of analyzing capital investment proposals?


Net present value

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