Indicate Whether Each of the Following Statements Is True or False

question 70

Short Answer

Indicate whether each of the following statements is true or false.
If two capital investments both have positive net present values,both offer an actual rate of return that is higher than the required rate of return.______
Company M has two potential capital investments,each of which has a positive net present value.M can only accept one of the investments.In this situation,it should always accept the project that has the higher net present value.______
Net present value is calculated by dividing the present value of cash inflows by the present value of cash outflows associated with a capital investment.______
The present value index can be used to compare different capital investment projects.______
The higher the present value index,the lower the rate of return per dollar invested in the project.______

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Definitions:

Disposable Income

Economic resources that households can utilize for spending and saving actions after income tax deductions.

Savings

The portion of income that is not spent on current expenditures and instead set aside for future use.

Disposable Income

The disposable capital for households' spending and saving endeavors after income taxes.

Consumption

The process of purchasing goods and services to fulfill the needs and wants of individuals.