Which of the following statements is true? An increase in t…

Which of the following statements is true? An increase in the expected salvage value at the end of a capital budgeting project will increase the internal rate of return for that project. The minimum required rate of return is the discount rate that makes the net present value of the project equal to zero.

Maple Thread Inc. has gathered the following data on a propo…

Maple Thread Inc. has gathered the following data on a proposed investment project (Ignore income taxes.): Investment in depreciable equipment $ 640,000   Annual net cash flows  $ 86,000   Life of the equipment 20 years Salvage value $ 0   Discount rate 9%   Maple uses straight-line depreciation on all equipment. Assume that cash flows occur uniformly throughout each year, except for the initial investment. The payback period for the investment is closest to:

Ridge Outfitters is considering a project that would require…

Ridge Outfitters is considering a project that would require an investment of $334,000 and would last for 8 years. The incremental annual revenues and expenses generated by the project during those 8 years would be as follows (Ignore income taxes.): Sales $ 230,000 Variable expenses 18,000 Contribution margin 212,000 Fixed expenses:   Salaries 36,000 Rents 49,000 Depreciation 44,000 Total fixed expenses 129,000 Net operating income $ 83,000 The scrap value of the project’s assets at the end of the project would be $26,000. The cash inflows occur evenly throughout the year. The project’s payback period is closest to: