When Several Alternative Investment Proposals of the Same Amount Are

question 91

Multiple Choice

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) :

• A) average rate of return.
• B) cash payback period.
• C) present value index.
• D) price-level index.

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Definitions:

Rebuilt/Exchange Unit

Refurbished equipment or components that have been restored to working order and are often exchanged for a non-functioning unit.

Differential Carrier

The housing that contains the gears of a vehicle's differential, which allows the wheels to rotate at different speeds.

Shim Pack Thickness

The total combined thickness of a set of shims, used to adjust clearances or alignments in machinery.

Gear Lube Viscosity

Refers to the thickness or resistance to flow of gear lubricants, important for ensuring the correct lubrication properties for gears and transmissions.