Question

1. Operating Income and Earnings Before Income and Taxes (EBIT) is the same item on an...

1. Operating Income and Earnings Before Income and Taxes (EBIT) is the same item on an income statement. True or false?

2. When comparing two projects, the project with the higher Net Present value (NPV), will also have the higher Internal Rate of Return. True or false?

3. If a company would like to increase the risk of a project, they would lower the interest rate (discount rate) they use in their Net Present Value calculations. True or false?

4. Depreciation is a non-cash expense. True or false?

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Answer #1

1. Operating Income and Earnings Before Income and Taxes (EBIT) is the same item on an income statement. True or false? - TRUE

2. When comparing two projects, the project with the higher Net Present value (NPV), will also have the higher Internal Rate of Return. True or false? - TRUE

3. If a company would like to increase the risk of a project, they would lower the interest rate (discount rate) they use in their Net Present Value calculations. True or false? - FALSE

4. Depreciation is a non-cash expense. True or false? - TRUE

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