Podcast
Questions and Answers
What is the main limitation of the Payback model?
What is the main limitation of the Payback model?
- Ignores the time value of money (correct)
- Considers profitability
- Ignores cash flows
- Emphasizes cash flows
What does a positive Net Present Value (NPV) indicate?
What does a positive Net Present Value (NPV) indicate?
- The project meets the minimum desired rate of return and is eligible for further consideration (correct)
- The project will recover the project investment quickly
- The project ignores the time value of money
- The project is rejected
What does the Net Present Value (NPV) model use to compute the present value of all net cash inflows?
What does the Net Present Value (NPV) model use to compute the present value of all net cash inflows?
- Discount rate (correct)
- Payback period
- Return on investment
- Profit margin
Which model uses a list of questions to review potential projects and determine their acceptance or rejection?
Which model uses a list of questions to review potential projects and determine their acceptance or rejection?
What is the main drawback of the Checklist Model?
What is the main drawback of the Checklist Model?
Which nonfinancial strategic criterion aims to prevent government intervention and regulation?
Which nonfinancial strategic criterion aims to prevent government intervention and regulation?
What does the organization need to do when reassessing its goals and priorities?
What does the organization need to do when reassessing its goals and priorities?
Which type of projects involve technological breakthroughs with high commercial payoffs?
Which type of projects involve technological breakthroughs with high commercial payoffs?
What is used to balance the portfolio for risks and types of projects?
What is used to balance the portfolio for risks and types of projects?
Which term refers to projects that showed promise at one time but are no longer viable?
Which term refers to projects that showed promise at one time but are no longer viable?
