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Which method for evaluating capital investment p flows originating from the a. Net present value b. Average rate of return c. Internal rate of return d. Cash payback 26. proposals reduces the expected future net cash proposals to their present values and computes a net present value? 27. Which of the following can be used to place capital investment proposals involving different amounts of investment on a comparable basis for purposes of net present value analysis? a. Price-level index b. Future value index c. Rate of investment index d. Present value index An analysis of a proposal by the net present value method indicated that the present value of future cash inflows exceeded the amount to be invested. Which of the following statements best describes the results of this analysis? a. The proposal is desirable and the rate of return expected from the proposal exceeds the 28. b. The proposal is desirable and the rate of return expected from the proposal is less than the . The proposal is undesirable and the rate of return expected from the proposal is less than d. The proposal is undesirable and the rate of return expected from the proposal exceeds the minimum rate used for the analysis. minimum rate used for the analysis. the minimum rate used for the analysis minimum rate used for the analysis. 29. Using the following partial table of present value of $1 at compound interest, determine the present value of $20,000 to be received four years hence, with earnings at the rate of 10% a year: 6% .943 890 840 .792 10% 909 826 751 683 12% 893 797 712 .636 a. $13,660 b. $12,720 c. $15,840 d. $10,400 al alternative investment proposals of the same amount are being considered, the one with the largest net present value is the most desirable. If the alternative proposals involve different amounts of investment, it is useful to prepare a relative ranking of the proposals by using a(n): a. average rate of return b. consumer price index c. present value inderx d. price-level index

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