
Investment Appraisal
Authored by Ejaz khan
Other
University
Used 2+ times

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30 questions
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1.
FILL IN THE BLANK QUESTION
1 min • 1 pt
An investor deposits $10,000 in a fund that pays 6% interest compounded annually. What will be the value of the investment at the end of 5 years (to the nearest dollar)?
2.
FILL IN THE BLANK QUESTION
1 min • 1 pt
How much should be invested today to accumulate $15,000 in 4 years at a compound interest rate of 8% per annum (to the nearest dollar)?
3.
FILL IN THE BLANK QUESTION
1 min • 1 pt
A company is evaluating a project that provides perpetual annual cash inflows of $12,000. If the cost of capital is 10%, what is the present value of the project?
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
A machine generates annual savings of $5,000 forever. If the firm’s cost of capital is 12%, what is the maximum price the company should pay for this machine?
$41,667
$60,000
$50,000
$24,000
5.
MULTIPLE CHOICE QUESTION
1 min • 1 pt
A project generates $20,000 per year for 4 years starting at the end of Year 2. If the discount rate is 10%, what is the present value of the cash inflows (to the nearest ten dollars)?
$41,120
$75,820
$63,400
$57,640
6.
MULTIPLE CHOICE QUESTION
1 min • 1 pt
A machine will generate cash inflows of $15,000 annually for 5 years, starting from the end of year 3. The discount rate is 8%. What is the present value of these inflows (to the nearest ten dollars)?
$51,350
$47,550
$59,900
$39,440
7.
MULTIPLE CHOICE QUESTION
3 mins • 1 pt
A company buys equipment for $100,000, eligible for 25% reducing balance capital allowance. The company pays tax at 30% and the discount rate is 10%. The useful life is 4 years for the equipment. What is the present value of tax savings on capital allowance? (to the nearest hundred dollars)
$16,800
$54,300
$23,300
$54,200
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