1.The company\'s minimum rate of return is also referred to as its profit margin

Question

1.The company's minimum rate of return is also referred to as its profit margin.

2.Only quantitative data are used in the capital investment decision-making process.

3.The payback period is based on a net present value of cash flows.

4.The most commonly used methods in evaluation of capital investment proposals are net present value method, payback period method, and the accounting rate-of-return method.

5.Capital investment analysis is also known as capital budgeting.

6.Availability of funds is not a criterion for deciding on capital investment proposals.

7.The salvage value of an old asset in a machine replacement decision is irrelevant.

Explanation / Answer

Answer 1 FALSE Answer 2 FALSE Answer 3 TRUE Answer 4 TRUE Answer 5 TRUE Answer 6 TRUE Answer 7 FALSE

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