The process by which management plans, evaluates, and controls long-term investment decisions involving fixed assets is called:


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Decisions to install new equipment, replace old equipment, and purchase or construct a new building are examples of
a.Investments must earn a reasonable rate of returnb.Employees are able to determine and propose capital equipment for their divisions or departmentsc.Proposals should match long term goals.d.All of the above.
By converting dollars to be received in the future into current dollars, the present value methods take into consideration that money:
Which of the following are two methods of analyzing capital investment proposals that both ignore present value?
The method of analyzing capital investment proposals that divides the estimated average annual income by the average investment is:
The primary advantages of the average rate of return method are its ease of computation and the fact that:
Which method for evaluating capital investment proposals reduces the expected future net cash flows originating from the proposals to their present values and computes a net present value?
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?
The proposal is desirable and the rate of return expected from the proposal exceeds the minimum rate used for the analysis.
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?
Which method of evaluating capital investment proposals uses the concept of present value to compute a rate of return?
Which of the following is a method of analyzing capital investment proposals that ignores present value?
The methods of evaluating capital investment proposals can be separated into two general groups--present value methods and:
When several 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):
Which method of evaluating capital investment proposals uses present value concepts to compute the rate of return from the net cash flows expected from capital investment proposals?
The cash payback method is widely used in evaluating investments. The following are reasons why this method is used except:
All of the following qualitative considerations may impact upon capital investments analysis except:
All of the following qualitative considerations may impact upon capital investments analysis except:
Which of the following provisions of the Internal Revenue Code can be used to reduce the amount of the income tax expense arising from capital investment projects?
Adjust the life of Proposal J to a time period that is equal to that of Proposal F by estimating a residual value at the end of year six.
Assume in analyzing alternative proposals that Proposal F has a useful life of six years and Proposal J has a useful life of nine years. What is one widely used method that makes the proposals comparable?
Which of the following would not be considered a good managerial tool in making a decision for determining a capital investment?
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