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Chrome File Edit View History Bookmarks People Window Help Quiz 2 Secure https attempt 526907 Question 5 Not yet awered Points out of 1 Y Flag question Which one of the following indicates that a project is axpected to create value for its owners Select one a.Intemal rate of return that is less than the requirement b.Proftbility index less than 10 e.Postive net present value d. Payback period greater than the requirement e. Positive average aocounting rate of returm O Question 6 Not yet answered Points out of 1.00 P Flag question The net present value Select one O a. ignores cash flows that are distant in the future Ob method of analysis cannot be applied to mutualy exclusive projects c is equal to the initial investment when the internal rate of retum is equail to the nequined retum O d is unaflected by the timing of an investments cash fows edecreases as the required rate of sefun increases Question 7 (Which one of the following is generally considered to be the best form of analysis if you have to select a single method t Not yet answered

Explanation / Answer

5) The correct choice is C

Explanation : - A positive net present value indicates that a project is economically viable and also net present value method takes into account the time value of money. Therefore a positive net present value creates value for its owners.

6) The correct choice is e

Explanation:- The net present value varies inversely with the rate at which the future payments are discounted,increasing the discount rate sufficiently would cause the net present value of the project to decrease.

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