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    1-A project's net present value, ignoring income taxes, is affected by:

    a- the net book value of an asset that is replaced.

    b- the depreciation on an asset that is replaced.

    c- the depreciation to be taken on assets used directly on the project.

    d- proceeds from the sale of an asset that is replaced.

    2-A company has unlimited funds to invest at its discount rate. The company should invest in all projects having:

    a- an internal rate of return greater than zero.
    b- a net present value greater than zero.
    c- a simple rate of return greater than the discount rate.
    d- a payback period less than the project's estimated life.

    3-When the cash flows are the same every period after the initial investment in a project, the payback period is equal to:

    a- the net present value.
    b- the simple rate of return.
    c- the factor of the internal rate of return.
    d- the payback rate of return.

    4-The project profitability index and the internal rate of return:

    a- will always result in the same preference ranking for investment projects.
    b- will sometimes result in different preference rankings for investment projects.
    c- are less dependable than the payback method in ranking investment projects.
    d- are less dependable than net present value in ranking investment projects

    5-A preference decision:

    a- is concerned with whether a project clears the minimum required rate of return hurdle.
    b- comes before the screening decision.
    c- is concerned with determining which of several acceptable alternatives is best.
    d- All of the above

    6-When evaluating a project, the portion of the fixed corporate headquarters expense that would be allocated to the project should be:

    a- included as a cash outflow on an after-tax basis by multiplying the expense by one minus the tax rate.
    b- included as a cash outflow on an after-tax basis by multiplying the expense by the tax rate.
    c- included as a cash outflow on a before-tax basis.
    d- ignored.

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    Solution Preview

    Please eee the attached file.

    1-A project's net present value, ignoring income taxes, is affected by:

    a- the net book value of an asset that is replaced.

    b- the depreciation on an asset that is replaced.

    c- the depreciation to be taken on assets used directly on the project.

    d- proceeds from the sale of an asset that is replaced.

    2-A company has unlimited funds to invest at its discount rate. The company should invest in all projects having:

    a- an internal rate of return greater ...

    Solution Summary

    This solution is comprised of a detailed explanation to answer what a project's net present value, ignoring income taxes, is affected by.

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