Rossiter Restaurants is analyzing a project that requires $180,000 of fixed assets

Which one of the following methods determines the amount of the change a proposed project will have on the value of a firm?    A.  net present value B.  discounted payback C.  internal rate of return D.  profitability index E.  payback Refer to section 9.1

14.

If a project has a net present value equal to zero, then:    A.  the total of the cash inflows must equal the initial cost of the project. B.  the project earns a return exactly equal to the discount rate. C.  a decrease in the project's initial cost will cause the project to have a negative NPV. D.  any delay in receiving the projected cash inflows will cause the project to have a positive NPV. E.  the project's PI must be also be equal to zero. Refer to sections 9.1 and 9.6

15.

Rossiter Restaurants is analyzing a project that requires $180,000 of fixed assets. When the project ends, those assets are expected to have an aftertax salvage value of $45,000. How is the $45,000 salvage value handled when computing the net present value of the project?    A.  reduction in the cash outflow at time zero B.  cash inflow in the final year of the project C.  cash inflow for the year following the final year of the project D.  cash inflow prorated over the life of the project E.  not included in the net present value Refer to section 9.1

16.

Which one of the following increases the net present value of a project?    A.  an increase in the required rate of return B.  an increase in the initial capital requirement C.  a deferment of some cash inflows until a later year D.  an increase in the aftertax salvage value of the fixed assets E.  a reduction in the final cash inflow Refer to section 9.1