Long-Term Investments

question 21

Multiple Choice

Long-term investments:

• A) Are current assets.
• B) Include funds earmarked for a special purpose such as bond sinking funds.
• C) Must be readily convertible to cash.
• D) Are expected to be converted into cash within one year.
• E) Include only equity securities.

Compare and contrast the assumptions underlying the internal rate of return and net present value methods.

Calculate the net present value of an investment project taking into account all relevant cash flows.

Understand the role of discount rates in the valuation of investment projects.

Understand the various types of cardinality symbols and their meanings in database diagrams.

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Definitions:

Planner's Assumptions

Fundamental assumptions made by planners about the future conditions and variables that will affect project outcomes or business conditions.

Implied Hypothesis

An unstated hypothesis thought to influence a situation or experiment's outcome indirectly.

Null Hypothesis

A hypothesis that assumes no significant difference or effect in a study, which researchers seek to test against the alternative hypothesis.

Alternative Hypothesis

The hypothesis that is considered if the null hypothesis is rejected, indicating that there is a significant effect or difference.