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BMAL 590 ACCOUNTING EXAM TEST QUESTIONS AND ANSWERS VERIFIED LATEST UPDATE (A PASS)
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BMAL 590 ACCOUNTING EXAM TEST QUESTIONS AND ANSWERS VERIFIED LATEST UPDATE (A 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 ca...

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  • December 27, 2024
  • 7
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • bmal 590 accounting exam test questions and answer

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  • BMAL 590
  • BMAL 590

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BMAL 590 ACCOUNTING EXAM TEST
QUESTIONS AND ANSWERS VERIFIED
LATEST UPDATE (A 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




Katelyn Whitman© 2025, All Rights Reserved.

, 2|Page


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


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

flows exceeded the amount to be invested. Which of the following statements best describes 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


All of the following are factors that may complicate capital investment analysis EXCEPT - ✔✔Sunk cost


Which of the following provisions of the Internal Revenue Code can be used to reduce the amount of the

income tax expense arising from the capital investment projects? - ✔✔Depreciation deduction



Katelyn Whitman© 2025, All Rights Reserved.

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