Indicate Whether Each of the Following Statements Is True or False

question 113

Short Answer

Indicate whether each of the following statements is true or false.
1. 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.
2. 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.
3. 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.
4. The present value index can be used to compare different capital investment projects.
5. The higher the present value index, the lower the rate of return per dollar invested in the project.

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Definitions:

Totals Row

A row at the end of a table or spreadsheet that provides summation, average, count, or other aggregate functions of the data in each column.

Calculated Field

A field in databases or spreadsheets that performs a calculation using values from other fields.

Make-Table Query

A type of query in database applications used to create a new table from the results of a select query.

Parameter Query

A type of database query that requires the user to provide one or more criteria values upon which the search is based, making the query flexible and interactive.