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A company is looking to replace a machine with a new unit that is more efficient. The controller asks one of his financial analysts to prepare a net present value (NPV) analysis of the project. In preparing the NPV, which of the following factors is least likely to be relevant to the decision? a) The purchase price of the old machine b) The salvage value of the old machine c) The cost of repairs that have to be made immediately on the old machine d) The annual operating cost of the new machine JYP Inc. (JYP) is evaluating two projects and has gathered the following data about them. JYP has a 10% required rate of return for both projects. Assume all cash flows are after tax. If the projects are mutually exclusive, the company should: a) Accept Project A and reject Project B. b) Reject Project A and accept Project B. c) Accept both projects. d) Reject both projects. a) 4.97 years Which of the following statements is the most accurate regarding a normal capital budgeting project? a) If the NPV of its future cash flows is greater than 0 , then the IRR is equal to the discount rate. b) If the IRR is greater than 0 , then it must have a positive NPV. c) If the profitability index (PI) is greater than 0 , then the project must have a positive NPV. d) If the IRR is greater than the discount rate, then the project's profitability index will be greater than 1

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