If the maximum acceptable payback period was increased to 5 years all projects would be acceptable
QUESTION 4
Ahmed is analysing two investments, Investment A has an IRR of 23% and Investment B has an IRR of 17%, if the cost of capital is 10% then:
Both projects are rejected due to the low IRR.
Both projects are rejected as the IRR is higher than the cost of capital.
Investment B is better than Investment A.
None of the above are true.
QUESTION 5
General Motors has current assets $5000, non-current assets $3000, plant and equipment $1500, notes payable $800 and retained earnings $1000, using the standardized financial statement method how
would notes payables appear?
10%
12.5%
8.42%
20%