Reference no: EM132603657

Question 1: A company has unlimited funds to invest at its discount rate. The company should invest in all projects having:

Select one:

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.

Question 2: Break-even analysis assumes that:

Select one:

a. Total revenue is constant.

b. Unit variable expense is constant.

c. Unit fixed expense is constant.

d. Selling prices must fall in order to generate more revenue.

Question 3: A project's net present value, ignoring income taxes, is affected by:

Select one:

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.