According to the NPV acceptance criterion, projects: (Points : 1) with a positive NPV should be accepted, since they are value increasing. with the highest NPV should be accepted. with an NPV over $10,000 should be accepted, since value increases less than that are trivial. are acceptable only if the ratio of benefits to costs is greater than zero.

Which of the following is true when a company has very little debt? (Points : 1) The expected costs of bankruptcy will be moderate. The expected costs of bankruptcy will be about zero. The risk of bankruptcy is still significant. Managers will work very hard to avoid bankruptcy.

Question 7. 7. Sunk costs are best described as: (Points : 1)

money that has been lost. an expenditure that did not produce a profitable product. an expenditure on a product that was later discontinued. expenditures on a proposed project that cannot be recovered whether the project is implemented or not.

Question 8. 8. The payback period has several weaknesses. From the list below, identify the item that is NOT necessarily a weakness of the payback period method. (Points : 1)

There is no theoretically correct way to tie an acceptance criterion to shareholder wealth creation. It is simple to compute. It ignores all cash flows after the payback period. It ignores the time value of money. d. have cash flows that increase over time with product market penetration.