Q 1. Question 1 1/1 Management is considering purchasing a new piece of equipment costing $ 750,000. The equipment is expected to have a 5-year useful life. The required rate of return is 7%. What is the present value of the initial cost of the equipment? 2. Question 2 1/1 Evaluating the payback period and amount of capital investments is not needed to determine whether proposed investment strategies are a practical solution to further the success of the company. 1. T 3. Question 3 1/1 If a company does not maintain operations, the company will eventually lose market share and not grow as most companies’ desire. 4. Question 4 1/1 When evaluating capital investment proposals, the monetary returns on these investment opportunities must be calculated and analyzed. 1. T 5. Question 5 0/1 When evaluating capital investment opportunities, we look at actual cash flows instead of the accrual basis of accounting.

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