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3.8 Investment Appraisal Complete Questions And Correct Detailed Answers.
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Which of the following is an example of investment in a business context? - correct answer Purchasing new machinery Factors that affect a multinational company's investment decision are least likely to include - correct answer ...

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  • August 22, 2024
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  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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3.8 Investment Appraisal

Which of the following is an example of investment in a business context? - correct answer
Purchasing new machinery



Factors that affect a multinational company's investment decision are least likely to include - correct
answer Leadership and management styles



Which of the following investment appraisal techniques use time as its unit of measurement? - correct
answer Payback period



Which investment appraisal method allows a firm to see whether it will break-even on the purchase of a
fixed asset before it needs to be replaced? - correct answer Payback period



The average rate of return can best be described as an investment appraisal technique that - correct
answer Calculates the average annual profit of a project as a percentage of the
principal



Which quantitative factor applies to a firm considering investing in a new computerized stock control
system? - correct answer The firm's cash flow position



Which of the following is least important for firms that use the payback period method of investment
appraisal? - correct answer Firms that focus on profitability rather than short
term cash flows



Which statement below does not apply to the payback period? - correct answer
It favors projects that have high profitability over time



Which business situation would most suit the payback period of investment appraisal? - correct answer
Manufacturing processes where technology changes frequently

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