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Book Cover
Financial and Managerial Accounting: The Basis for Business Decisions, 12/e
Jan R. Williams, University of Tennessee
Susan F. Haka, Michigan State University
Mark S. Bettner, Bucknell University
Robert F. Meigs
Capital Budgeting

True/False Quiz

Please answer all questions



1

An expenditure made by a company to purchase a fleet of delivery trucks is an example of a capital investment.
A)True
B)False
2

In selecting among alternative investment opportunities, the investment with the shortest payback period is the most desirable alternative.
A)True
B)False
3

A proposed investment of $40,000, which over its life of eight years will produce an annual net cash flow of $7,000 will have a positive net present value regardless of the rate of return required by the investor.
A)True
B)False
4

A capital budget audit is designed to disclose errors in determining the company's cost of capital.
A)True
B)False








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