Investment Appraisal Techniques

Investment Appraisal Techniques

University

10 Qs

quiz-placeholder

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Investment Appraisal Techniques

Investment Appraisal Techniques

Assessment

Quiz

Business

University

Hard

Created by

Sandeep Singh Sikerwar

Used 42+ times

FREE Resource

10 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

45 sec • 1 pt

The Payback Period (PBP) will always select the investment that

Gives the highest rate of return

Returns the cost of investment first

Has the highest total net cash flow

2.

MULTIPLE CHOICE QUESTION

45 sec • 1 pt

Which of the following is NOT relevant to the use of the NPV method of investment appraisal?

It relies on discounted cash flows

It’s expressed as a percentage for easier comparison

Its value will fall if interest rates rise

A financially viable investment has a positive value

3.

MULTIPLE CHOICE QUESTION

45 sec • 1 pt

Which TERM refers to the numerical value needed to calculate the NPV of an investment?

Ratio

Net cash flow

Discounted cash flows

Discount factor

4.

MULTIPLE CHOICE QUESTION

45 sec • 1 pt

The initial investment is £5,000. In the first year the firm paid back £1,000 in the second year £2,000 and the third year 3,000. The payback period for the investment is:

2 years

3 years

3 years 4 months

2 years 8 months

5.

MULTIPLE CHOICE QUESTION

45 sec • 1 pt

The following are all methods of investment appraisal, EXCEPT:

Payback period

Balance sheet return

Net present value

Discounted Payback period

6.

MULTIPLE CHOICE QUESTION

45 sec • 1 pt

NPV will be positive if

Companies work hard

Discounted cash flows justify initial investment

Money is given back

They won't be

7.

MULTIPLE CHOICE QUESTION

45 sec • 1 pt

The amount of time taken to generate sufficient cash to cover its own investment costs is called ...

Return period

Payback period

Depreciation period

Investment period

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