F IfP 500, F-983.5 an F You invest S 1000 now, 10 years later the future val thi
ID: 1124998 • Letter: F
Question
F IfP 500, F-983.5 an F You invest S 1000 now, 10 years later the future val this project. if MARR 5% F You always reject any project that has B/C ratio 1 since you do not make any money. F It is possible that we might find 2 valid values of ROR for the same project. 4. T 5. T F Particular piece of land such as land in the flooding area can be considered as depreciable asset. 6. T F Future Worth (FW) method is not an accurate method. As a result it is not a popular method. 7. T F Inflation/deflation is the term that related to the change in the price levels in an economy. 8. T F In PW method, we do not renew the shorter-life project only when it is not renewable. 9. TF Gold. Inventories and Building are depreciable assets. 10. T Draw a correct Breakeven Chart is the most difficult part of Breakeven analysis technique. Payback period method is the most popular method since it is easy to calculate. The calculated value from linear interpolation is an approximated value. A long term/steady business should use Declining Balance Method to calculate depreciation F F 12. T F 13. T F charge of the asset since we can significantly save the tax payment at the earlier year of business. 14. T F In Payback period, interest and salvage value m be used in the calculation process. Fill in the blanks with correct key word (s) or answer(s) r of money may vary from time to time depending upon the to time depending upon the nrocess to select the best alternative.Explanation / Answer
Answer 3 . The statement is false, as basically when B/C ratio is equal to1, than it is acceptable criteria for the business.
4. False, it is not possiable that there are two ROR of the same project in the business.
5. False, land is always appericable asset in the business.
6. True, as it does not considered with the adjusted inflation into an account.
7. True, inflation and deflation both are related to increase or decrease in the value of an assets.
8. False, as it does not taken into account shorter life project.
9. False, gold, investment and building are appericable asset in the business.
10. False, because break even chart is easy and it is easily drawn .
11. True, pay back period method is most profitable in the business scanerio.
12. False, the statement is used to calculate value from linear interpolation is an approxmaite value in the business.
13. True, as long term/ steady business should be used declining business method.
14. True, the statement show that interest and salvage value may or may not used to calculate the pay back method.
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