Question

In: Accounting

1. Which One is False? a. The Desired Rate of Return is also referred to as...

1. Which One is False?

a. The Desired Rate of Return is also referred to as the Internal Rate of Return.

b. A Capital Project is a Costly Expenditure used to Acquire Assets that will benefit an Organization for Many Years in the Future.

c. Capital Budgeting is the Planning and Decision Process used to make Capital Investment Decisions.

d. The Decision to Build a New Factory is a Capital Budget Decision.

2. Which One is False?

a. A Positive Net Present Value (NPV) indicates that the Internal Rate of Return is greater than the Required Rate of Return.

b. The Term “Cost of Capital” means the Same as the Internal Rate of Return.

c. The Mortgage Interest Paid on a Home Loan is Deductible on a US Federal Income Tax Return.

d. The Term “Discount Rate” means the Same as the Required Rate of Return.

Expert Solution

1) Desired rate of return is the rate of return which is the investors expect to earn from the investment. Where is internal rate of return the rate at which the net present value will be zero.

Therefore desired rate of return is not the same as internal rate of return.

also capital project is a cost expenditure which is used to acquire asset and through which it will benefit organisation for many years in the future.

capital budgeting is a type of planning which is used to make capital investment decision and decision to build a new factory is called as capital budgeting decision.

Therefore the correct option is A

2) A positive net present value indicates that the required rate of return is higher than the internal rate of return because at the internal rate of return the net present value is zero and if the net present value is positive it means that required rate of return is higher than the internal rate of return.

Also cost of capital is same as internal rate of return. Moreover discount rate means the same as required rate of return at which the cash flows are discounted. mortgage interest paid on home loan is deductible on US federal income tax return.

Therefore the correct option is A

If you find the answer helpful please upvote.

ekkarill92 answered 2 years ago

The natural rate of unemployment is also referred to as: Group of answer choices All of...

The natural rate of unemployment is also referred to as: Group of answer choices All of the above The non-accelerating inflation rate of unemployment. The equilibrium rate of unemployment.

True / False 1- The tax bill of 1935 was referred to as the “soak the...

True / False 1- The tax bill of 1935 was referred to as the “soak the middle class” tax increase. 2- “Regime uncertainty” was the concept used to explain the slow reductions in unemployment that occurred during the latter 1930s. 3- According to Polleit, the advice given by Mises helped to stop the hyperinflation that was ongoing in Austria in 1922. 4- Among the hyperinflations cited in the article were China in 1949-1950, Russia in 1992, and Italy in 2003....

Find the arithmetic annual mean rate of return and the geometric annual mean rate of return. Which one should be used?

YearBeginning valueEnding value111011521151383138110,4Find the arithmetic annual mean rate of return and the geometric annual mean rate of return. Which one should be used?

Which of the following sentences is FALSE? Select one: a. Interest rate risk is the risk...

Which of the following sentences is FALSE? Select one: a. Interest rate risk is the risk that results from the changes in interest rates and thereby impact the bond value. b. As a bond approaches maturity, the price of the bond will approach its par value until, the bond is worth its face value at maturity. c. The value of a bond that pays semiannual interest is greater than that of an otherwise equivalent annual coupon interest paying bond. d....

Which of the following statements is FALSE? Select one: A. In a standard interest rate swap,...

Which of the following statements is FALSE? Select one: A. In a standard interest rate swap, one party agrees to pay coupons based on a fixed interest rate in exchange for receiving coupons based on the prevailing market interest rate during each coupon period. B. An interest rate swap is a contract entered into with a bank, much like a forward contract, in which the firm and the bank agree to exchange the coupons from two different types of loans....

Making products available to customers in the quantities desired; sometimes referred to as “place” because it...

Making products available to customers in the quantities desired; sometimes referred to as “place” because it helps to remember the marketing mix as the “4 Ps.” Group of answer choices Product Promotion Price Distribution (Place) 2 The marketing mix involves four variables ... the [ Select ] ["Promotion", "Price", "Distribution (Place)", "Product"] is a complex mix of tangible and intangible attributes that provide...

2. True or False. The internal rate of return (IRR) is defined as the discount rate,...

2. True or False. The internal rate of return (IRR) is defined as the discount rate, which causes the net present value of a project to equal zero. A. True B. False 7. An investment project has annual cash inflows of $2800, $3700, $5100, and $4300, and a discount rate of 14 %. What is the discounted payback period for these cash flows if the initial cost is $5,200? A. 0.96 years B. 1.96 years C. 2.56 years D. 2.96...

True or false? The expected rate of return to the holder of a corporate bond is...

True or false? The expected rate of return to the holder of a corporate bond is higher than the bond’s yield to compensate the holder for the risk of the bond defaulting. Justify

3. Diabetes mellitus is characteristic by the hyperglycemia. Type 1 diabetes is also referred to as...

3. Diabetes mellitus is characteristic by the hyperglycemia. Type 1 diabetes is also referred to as insulin-dependent diabetes, meaning that the affected person lacks insulin in the blood. Please explain the biochemical mechanism that insulin deficiency will lead to hyperglycemia. 4. Trypanosomes are unicellular parasites that cause sleeping sickness. During one stage of their life cycle, these organisms live in the bloodstream and derive all of . their energy from glycolysis.(a) Propose potential targets for treating sleeping sickness.(b) What are...

Which one of the following investments provides the highest effective annual rate of return (i.e., which...

Which one of the following investments provides the highest effective annual rate of return (i.e., which of the following investments is the BEST = the largest EAR) over an investment horizon of 10 years)? a. An investment which has a 3.0 percent nominal rate with annual compounding. b. An investment which has a 2.98 percent nominal rate with semi-annual compounding. c. An investment which has a 2.965 percent nominal rate with quarterly compounding. d. An investment which has a 2.9575...