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Principles of Managerial Finance, 14e (Gitman/Zutter)
Chapter 10 Capital Budgeting Techniques
10.1 Understand the key elements of the capital budgeting process.
1) Capital budgeting techniques are used to evaluate a firm's fixed asset investments which
provide the basis for the firm's earning power and value.
Answer: TRUE
Diff: 1
Topic: Overview of Capital Budgeting
Learning Obj.: LG 1
Learning Outcome: F-08
Question Status: Previous Edition
AACSB Tag: Analytic Skills
2) The purchase of additional physical facilities, such as additional property or a new factory, is
an example of a capital expenditure.
Answer: TRUE
Diff: 1
Learning Obj.: LG 1
AACSB Tag: Reflective Thinking Skills
3) Capital budgeting is the process of evaluating and selecting short-term investments that are
consistent with the firm's goal of maximizing owners' wealth.
Answer: FALSE
Diff: 1
Learning Obj.: LG 1
Question Status: Revised
4) A capital expenditure is an outlay of funds invested only in fixed assets that is expected to
produce benefits over a period of time less than one year.
Answer: FALSE
Diff: 1
Learning Obj.: LG 1
1
Copyright © 2015 Pearson Education, Inc.
5) An outlay for advertising and management consulting is considered to be a fixed asset
expenditure.
Answer: FALSE
Diff: 1
Learning Obj.: LG 1
6) Capital expenditure proposals are reviewed to assess their appropriateness in light of a firm's
overall objectives and plans, and to evaluate their economic validity.
Answer: TRUE
Diff: 1
Learning Obj.: LG 1
7) The basic motives for capital expenditures are to expand operations, to replace or renew fixed
assets, or to obtain some other, less tangible benefit over a long period.
Answer: TRUE
Diff: 1
Topic: Motives for Capital Expenditure
Learning Obj.: LG 1
8) The primary motive for capital expenditures is to refurbish fixed assets.

Answer: FALSE
Diff: 1
Learning Obj.: LG 1
9) Research and development is considered to be a motive for making capital expenditures.

Answer: TRUE
Diff: 1
Learning Obj.: LG 1
2
10) The capital budgeting process consists of five distinct but interrelated steps: proposal
generation, review and analysis, decision making, implementation, and follow-up.
Answer: TRUE
Diff: 1
Topic: Steps in the Process
Learning Obj.: LG 1
11) The capital budgeting process consists of four distinct but interrelated steps: proposal
generation, review and analysis, decision making, and termination.
Answer: FALSE
Diff: 1
Learning Obj.: LG 1
12) Independent projects are projects that compete with one another for a firm's resources, so that
the acceptance of one eliminates the others from further consideration.
Answer: FALSE
Diff: 2
Topic: Basic Terminology
Learning Obj.: LG 1
13) If a firm has unlimited funds to invest in capital assets, all independent projects that meet its
minimum investment criteria should be implemented.
Answer: TRUE
Diff: 1
Learning Obj.: LG 1
3
14) In capital budgeting, the preferred approaches in assessing whether a project is acceptable
are those that integrate time value procedures, risk and return considerations, and valuation
concepts.
Answer: TRUE
Diff: 1
Topic: Capital Budgeting Techniques
Learning Obj.: LG 1
15) In capital budgeting, the preferred approaches in assessing whether a project is acceptable
are those that integrate time value of money, risk and return considerations, and valuation
concepts to select capital expenditures that are consistent with the firm's goal of maximizing
owners' wealth.
Answer: FALSE
Diff: 1
Learning Obj.: LG 1
16) A $60,000 outlay for a new machine with a usable life of 15 years is an operating
expenditure that would appear as a current asset on a firm's balance sheet.
Answer: FALSE
Diff: 1
Learning Obj.: LG 1
17) A nonconventional cash flow pattern associated with capital investment projects consists of
an initial outflow followed by a series of inflows.
Answer: FALSE
Diff: 1
Learning Obj.: LG 1
4
18) Time value of money should be ignored in capital budgeting techniques to make accurate
decisions.
Answer: FALSE
Diff: 2
Learning Obj.: LG 1
19) If a firm has limited funds to invest, all the mutually exclusive projects that meet its
minimum investment criteria should be implemented.
Answer: FALSE
Diff: 1
Learning Obj.: LG 1
20) Mutually exclusive projects are projects whose cash flows are unrelated to one another; the
acceptance of one does not eliminate the others from further consideration.
Answer: FALSE
Diff: 1
Learning Obj.: LG 1
21) The availability of funds for capital expenditures does not affect a firm's capital budgeting
decisions.
Answer: FALSE
Diff: 2
Learning Obj.: LG 1
5
22) Independent projects are those whose cash flows are unrelated to one another; the acceptance
of one does not eliminate the others from further consideration.
Answer: TRUE
Diff: 2
Learning Obj.: LG 1
23) Mutually exclusive projects are those whose cash flows are constant over a specified period
of time and more than one project needs to be accepted in order to implement capital budgeting
decisions.
Answer: FALSE
Diff: 1
Learning Obj.: LG 1
24) Independent projects are those whose cash flows compete with one another and therefore
more than one project needs to be accepted in order to implement the capital budgeting decision.
Answer: FALSE
Diff: 1
Learning Obj.: LG 1
25) Mutually exclusive projects are those whose cash flows compete with one another; the
acceptance of one eliminates the others from further consideration.
Answer: TRUE
Diff: 2
Learning Obj.: LG 1
6
26) If a firm is subject to capital rationing, it is able to accept all independent projects that
provide an acceptable return.
Answer: FALSE
Diff: 1
Learning Obj.: LG 1
27) If a firm has unlimited funds, it is able to accept all independent projects that provide an
acceptable return.
Answer: TRUE
Diff: 1
Learning Obj.: LG 1
28) If a firm is subject to capital rationing, it has only a fixed number of dollars available for
capital expenditures and numerous projects compete for these dollars.
Answer: TRUE
Diff: 1
Learning Obj.: LG 1
29) The ranking approach involves the ranking of capital expenditure projects on the basis of
some predetermined measure such as the rate of return.
Answer: TRUE
Diff: 1
Learning Obj.: LG 1
7
30) The accept-reject approach involves the ranking of capital expenditure projects on the basis
of some predetermined measure, such as the rate of return.
Answer: FALSE
Diff: 2
Learning Obj.: LG 1
31) A conventional cash flow pattern is one in which an initial outflow is followed only by a
series of inflows.
Answer: TRUE
Diff: 1
Learning Obj.: LG 1
32) Large firms evaluate the merits of individual capital budgeting projects to ensure that the
selected projects have the best chance of increasing the firm value.
Answer: TRUE
Diff: 1
Learning Obj.: LG 1
Question Status: New
33) A nonconventional cash flow pattern is one in which an initial inflow is followed by a series
of inflows and outflows.
Answer: TRUE
Diff: 1
Learning Obj.: LG 1
8
34) ________ is the process of evaluating and selecting long-term investments that are consistent
with a firm's goal of maximizing owners' wealth.
A) Recapitalizing assets
B) Capital budgeting
C) Ratio analysis
D) Securitization
Answer: B
Diff: 1
Learning Obj.: LG 1
35) A $60,000 outlay for a new machine with a usable life of 15 years is called ________.
A) capital expenditure
B) financing expenditure
C) replacement expenditure
D) operating expenditure
Answer: A
Diff: 1
Learning Obj.: LG 1
36) Fixed assets that provide the basis for a firm's earning and value are often called ________.
A) tangible assets
B) noncurrent assets
C) earning assets
D) book assets
Answer: C
Diff: 1
Learning Obj.: LG 1
9
37) Which of the following is true of a capital expenditure?
A) It is an outlay made to replace current assets.
B) It is an outlay expected to produce benefits within one year.
C) It is commonly used for current asset expansion.
D) It is commonly used to expand the level of operations.
Answer: D
Diff: 1
Learning Obj.: LG 1
38) The basic motive for capital expenditure is to ________.

A) expand operations
B) replace current assets
C) renew current assets
D) improve leverage
Answer: A
Diff: 1
Learning Obj.: LG 1
39) One of the primary motives for adding fixed assets to a firm is ________.
A) expansion
B) replacement
C) renewal
D) transformation
Answer: A
Diff: 1
Learning Obj.: LG 1
10
40) The final step in the capital budgeting process is ________.
A) implementation
B) follow-up
C) review and analysis
D) decision making
Answer: B
Diff: 1
Learning Obj.: LG 1
41) The first step in the capital budgeting process is ________.

A) review and analysis
B) implementation
C) decision making
D) proposal generation
Answer: D
Diff: 1
Learning Obj.: LG 1
42) Which of the following steps in the capital budgeting process follows the decision making
step?
A) proposal generation
B) review and analysis
C) transformation
D) implementation
Answer: D
Diff: 1
Learning Obj.: LG 1
11
43) ________ projects do not compete with each other; the acceptance of one ________ the
others from consideration.
A) Capital; eliminates
B) Independent; does not eliminate
C) Mutually exclusive; eliminates
D) Replacement; eliminates
Answer: B
Diff: 1
Learning Obj.: LG 1
44) ________ projects have the same function; the acceptance of one ________ the others from
consideration.
A) Capital; eliminates
B) Independent; does not eliminate
C) Mutually exclusive; eliminates
D) Replacement; eliminates
Answer: C
Diff: 1
Learning Obj.: LG 1
45) A firm with limited dollars available for capital expenditures is subject to ________.
A) capital dependency
B) capital gains
C) working capital constraints
D) capital rationing
Answer: D
Diff: 1
Learning Obj.: LG 1
12
46) Projects that compete with one another, so that the acceptance of one eliminates the others
from further consideration are called ________.
A) independent projects
B) mutually exclusive projects
C) replacement projects
D) capital projects
Answer: B
Diff: 1
Learning Obj.: LG 1
47) Which of the following is true of the accept-reject approach?

A) It involves ranking projects on the basis of some predetermined measure, such as the rate of
return.
B) It cannot be used when the firm has limited funds.
C) It can be used for making capital budgeting decisions when there is capital rationing.
D) It can be used only for evaluating mutually exclusive projects.
Answer: C
Diff: 1
Learning Obj.: LG 1
48) A conventional cash flow pattern associated with capital investment projects consists of an
initial ________.
A) outflow followed by a broken cash series
B) inflow followed by a broken series of outlay
C) outflow followed by a series of inflows
D) outflow followed by a series of outflows
Answer: C
Diff: 1
Learning Obj.: LG 1
13
49) A nonconventional cash flow pattern associated with capital investment projects consists of
an initial ________.
A) outflow followed by a series of both cash inflows and outflows
B) inflow followed by a series of both cash inflows and outflows
C) outflow followed by a series of inflows
D) inflow followed by a series of outflows
Answer: A
Diff: 1
Learning Obj.: LG 1
50) Which of the following is an example of a nonconventional pattern of cash flows?

A)
Year 0 1 2 3 4
cash flow -200 150 310 265 200
B)
Year 0 1 2 3 4
cash flow 200 100 -100 200 -300
C)
Year 0 1 2 3 4
cash flow -200 100 100 200 300
D)
Year 0 1 2 3 4
cash flow -200 150 150 150 150
Answer: B
Diff: 1
Learning Obj.: LG 1
14
10.2 Calculate, interpret, and evaluate the payback period.
1) In the case of annuity cash inflows, the payback period can be found by dividing the initial
investment by the annual cash inflow.
Answer: TRUE
Diff: 1
Topic: Payback Period
Learning Obj.: LG 2
2) The payback period is the amount of time required for a firm to dispose a replaced asset.
Answer: FALSE
Diff: 1
Learning Obj.: LG 2
3) For calculating payback period for an annuity, all cash flows must be adjusted for time value
of money.
Answer: FALSE
Diff: 1
Learning Obj.: LG 2
4) If a project's payback period is less than the maximum acceptable payback period, we would
accept it.
Answer: TRUE
Diff: 1
Learning Obj.: LG 2
15
5) If a project's payback period is greater than the maximum acceptable payback period, we
would reject it.
Answer: TRUE
Diff: 1
Learning Obj.: LG 2
6) If a project's payback period is greater than the maximum acceptable payback period, we
would accept it.
Answer: FALSE
Diff: 1
Learning Obj.: LG 2
7) The payback period of a project that costs $1,000 initially and promises after-tax cash inflows
of $300 for the next three years is 3.33 years.
Answer: TRUE
Diff: 1
Learning Obj.: LG 2
of $300 each year for the next three years is 0.333 years.
Answer: FALSE
Diff: 1
Learning Obj.: LG 2
16
of $3,000 each year for the next three years is 0.333 years.
Answer: TRUE
Diff: 1
Learning Obj.: LG 2
10) The payback period of a project that costs $1,000 initially and promises after-tax cash
inflows of $2,000 each year for the next three years is 0.5 years.
Answer: TRUE
Diff: 1
Learning Obj.: LG 2
11) The payback period is generally viewed as an unsophisticated capital budgeting technique,
because it does not explicitly consider the time value of money by discounting cash flows to find
present value.
Answer: TRUE
Diff: 1
Learning Obj.: LG 2
12) A project must be rejected if its payback period is less than the maximum acceptable
payback period.
Answer: FALSE
Diff: 1
Topic: Decision Criteria
Learning Obj.: LG 2
17
13) By measuring how quickly a firm recovers its initial investment, the payback period gives
implicit consideration to the time value of money and ignores the timing of cash flows.
Answer: FALSE
Diff: 2
Topic: Pros and Cons of Payback Analysis
Learning Obj.: LG 2
14) One strength of payback period is that it fully accounts for the time value of money.
Answer: FALSE
Diff: 1
Learning Obj.: LG 2
15) One weakness of payback period approach is its failure to recognize cash flows that occur
after the payback period.
Answer: TRUE
Diff: 1
Learning Obj.: LG 2
16) Since the payback period can be viewed as a measure of risk exposure, many firms use it as a
supplement to other decision techniques.
Answer: TRUE
Diff: 1
Learning Obj.: LG 2
18
17) The major weakness of payback period in evaluating projects is that it cannot specify the
appropriate payback period in light of the wealth maximization goal.
Answer: TRUE
Diff: 1
Learning Obj.: LG 2
18) Which of the following is an unsophisticated capital budgeting technique?

A) internal rate of return
B) payback period
C) profitability index
D) net present value
Answer: B
Diff: 1
Learning Obj.: LG 2
19) Which of the following capital budgeting techniques ignores the time value of money?
A) payback period approach
B) net present value
C) internal rate of return
D) profitability index
Answer: A
Diff: 1
Learning Obj.: LG 2
19
20) The ________ measures the amount of time it takes a firm to recover its initial investment.
A) profitability index
B) internal rate of return
C) net present value
D) payback period
Answer: D
Diff: 1
Learning Obj.: LG 2
21) An annuity is ________.

A) a mix of cash flows in conventional and nonconventional
B) a stream of perpetual cash flows
C) a series of constantly growing cash flows
D) a series of equal annual cash flows
Answer: D
Diff: 1
Learning Obj.: LG 2
22) Which pattern of cash flow stream is the most difficult to use when evaluating projects?
A) mixed stream
B) conventional flow
C) nonconventional flow
D) annuity
Answer: C
Diff: 1
Learning Obj.: LG 2
20
Table 10.1
23) The cash flow pattern depicted is associated with a capital investment and may be
characterized as ________. (See Table 10.1)
A) an annuity and a conventional cash flow
B) a mixed stream and a nonconventional cash flow
C) an annuity and a nonconventional cash flow
D) a mixed stream and a conventional cash flow
Answer: A
Diff: 1
Learning Obj.: LG 2
Table 10.2
24) The cash flow pattern depicted is associated with a capital investment and may be
characterized as ________. (See Table 10.2)
A) an annuity and a conventional cash flow
B) a mixed stream and a nonconventional cash flow
C) an annuity and a nonconventional cash flow
D) a mixed stream and a conventional cash flow
Answer: D
Diff: 1
Learning Obj.: LG 2
21
25) Payback is considered an unsophisticated capital budgeting because it ________.
A) gives explicit consideration to the timing of cash flows and therefore the time value of
money.
B) gives explicit consideration to risk exposure due to the use of the cost of capital as a discount
rate.
C) does not gives explicit consideration on the recovery of initial investment and possibility of a
calamity.
D) it does not explicitly consider the time value of money.
Answer: D
Diff: 1
Learning Obj.: LG 2
26) A firm is evaluating a proposal which has an initial investment of $35,000 and has cash
flows of $10,000 in year 1, $20,000 in year 2, and $10,000 in year 3. The payback period of the
project is ________.
A) 1 year
B) 2 years
C) between 1 and 2 years
D) between 2 and 3 years
Answer: D
Diff: 2
Learning Obj.: LG 2
27) A firm is evaluating a proposal which has an initial investment of $50,000 and has cash
flows of $15,000 per year for five years. The payback period of the project is ________.
A) 1.5 years
B) 2 years
C) 3.3 years
D) 4 years
Answer: C
Diff: 2
Learning Obj.: LG 2
22
28) Which of the following statements is true of payback period?
A) If the payback period is less than the maximum acceptable payback period, management
should be indifferent.
B) If the payback period is greater than the maximum acceptable payback period, accept the
project.
C) If the payback period is less than the maximum acceptable payback period, accept the project.
D) If the payback period is greater than the maximum acceptable payback period, management
should be indifferent.
Answer: C
Diff: 2
Learning Obj.: LG 2
29) What is the payback period for Tangshan Mining company's new project if its initial after-tax
cost is $5,000,000 and it is expected to provide after-tax operating cash inflows of $1,800,000 in
year 1, $1,900,000 in year 2, $700,000 in year 3, and $1,800,000 in year 4?
A) 4.33 years
B) 3.33 years
C) 2.33 years
D) 1.33 years
Answer: B
Diff: 2
Learning Obj.: LG 2
23
30) Should Tangshan Mining company accept a new project if its maximum payback is 3.5 years
and its initial after-tax cost is $5,000,000 and it is expected to provide after-tax operating cash
inflows of $1,800,000 in year 1, $1,900,000 in year 2, $700,000 in year 3, and $1,800,000 in
year 4?
A) Yes, since the payback period of the project is less than the maximum acceptable payback
period.
B) No, since the payback period of the project is more than the maximum acceptable payback
period.
C) Yes, since the risk exposure of the project is less than the maximum acceptable risk exposure.
D) No, since the risk exposure of the project is more than the maximum acceptable risk
exposure.
Answer: A
Diff: 2
Learning Obj.: LG 2
31) Should Tangshan Mining company accept a new project if its maximum payback is 3.25
years and its initial after-tax cost is $5,000,000 and it is expected to provide after-tax operating
cash inflows of $1,800,000 in year 1, $1,900,000 in year 2, $700,000 in year 3, and $1,800,000
in year 4?
A) Yes, since the payback period of the project is less than the maximum acceptable payback
period.
B) No, since the payback period of the project is more than the maximum acceptable payback
period.
C) Yes, since the risk exposure of the project is less than the maximum acceptable risk exposure.
D) No, since the risk exposure of the project is more than the maximum acceptable risk
exposure.
Answer: B
Diff: 2
Learning Obj.: LG 2
24
32) Evaluate the following projects using the payback method assuming a rule of 3 years for
payback.
Year Project A Project B

0 -10,000 -10,000
1 4,000 4,000
2 4,000 3,000
3 4,000 2,000
4 0 1,000,000
A) Project A can be accepted because the payback period is 2.5 years but Project B cannot be
accepted because its payback period is longer than 3 years.
B) Project B should be accepted because even though the payback period is 2.5 years for Project
A and 3.001 for project B, there is a $1,000,000 payoff in the 4th year in Project B.
C) Project B should be accepted because you get more money paid back in the long run.
D) Both projects can be accepted because the payback is less than 3 years.
Answer: A
Diff: 3
Learning Obj.: LG 2
33) Which of the following is a disadvantage of payback period approach?

A) It does not examine the size of the initial outlay.
B) It does not use net profits as a measure of return.
C) It does not explicitly consider the time value of money.
D) It does not take into account an unconventional cash flow pattern.
Answer: C
Diff: 1
Learning Obj.: LG 2
25
34) Which of the following is a strength of payback period?
A) a disregard for cash flows after the payback period
B) only an implicit consideration of the timing of cash flows
C) merely a subjectively determined number
D) a measure of risk exposure
Answer: D
Diff: 1
Learning Obj.: LG 2
35) Which of the following is a reason for firms not using the payback method as a guideline in
capital investment decisions?
A) It gives an explicit consideration to the timing of cash flows.
B) It cannot be specified in light of the wealth maximization goal.
C) It is a measure of risk exposure and projects the possibility of a calamity.
D) It is easy to calculate and has intuitive appeal.
Answer: B
Diff: 1
Learning Obj.: LG 2
36) Some firms use the payback period as a decision criterion or as a supplement to sophisticated
decision techniques, because ________.
A) it explicitly considers the time value of money
B) it can be viewed as a measure of risk exposure due to its focus on liquidity
C) the determination of the required payback period is an objectively determined criteria
D) it considers the timing of cash flows and therefore the time value of money
Answer: B
Diff: 1
Learning Obj.: LG 2
26
10.3 Calculate, interpret, and evaluate the net present value (NPV) and economic value added
(EVA).
1) Net present value is considered a sophisticated capital budgeting technique since it gives
explicit consideration to the time value of money.
Answer: TRUE
Diff: 1
Topic: Net Present Value (NPV)
Learning Obj.: LG 3
2) The discount rate is the minimum return that must be earned on a project to leave a firm's
market value unchanged.
Answer: TRUE
Diff: 1
Learning Obj.: LG 3
3) The net present value is found by subtracting a project's initial investment from the present
value of its cash inflows discounted at a rate equal to the project's internal rate of return.
Answer: FALSE
Diff: 1
Learning Obj.: LG 3
4) A sophisticated capital budgeting technique that can be computed by subtracting a project's

initial investment from the present value of its cash inflows discounted at a rate equal to a firm's
cost of capital is called net present value.
Answer: TRUE
Diff: 1
Learning Obj.: LG 3
27
5) A sophisticated capital budgeting technique that can be computed by subtracting a project's
initial investment from the present value of its cash inflows discounted at a rate equal to a firm's
cost of capital is called profitability index.
Answer: FALSE
Diff: 1
Learning Obj.: LG 3
6) The NPV of a project with an initial investment of $1,000 that provides after-tax operating
cash flows of $300 per year for four years where the firm's cost of capital is 15 percent is
$856.49.
Answer: FALSE
Diff: 1
Learning Obj.: LG 3
7) The NPV of a project with an initial investment of $2,500 that provides after-tax operating
cash flows of $500 per year for four years where the firm's cost of capital is 15 percent is
$427.49.
Answer: FALSE
Diff: 1
Learning Obj.: LG 3
8) If net present value of a project is greater than zero, the firm will earn a return greater than its
cost of capital. The acceptance of such a project would enhance the wealth of the firm's owners.
Answer: TRUE
Diff: 1
Learning Obj.: LG 3
28
9) If the NPV is greater than the initial investment, a project should be rejected.
Answer: FALSE
Diff: 1
Learning Obj.: LG 3
10) If the NPV is less than the initial investment, a project should be rejected.
Answer: FALSE
Diff: 1
Learning Obj.: LG 3
11) If the NPV is greater than $0, a project should be accepted.

Answer: TRUE
Diff: 1
Learning Obj.: LG 3
12) For a project that has an initial cash outflow followed by cash inflows, the profitability index
(PI) is equal to the present value of cash inflows divided by the cost of capital.
Answer: FALSE
Diff: 1
Topic: NPV and the Profitability Index
Learning Obj.: LG 3
13) Economic value added is the difference between an investment's net operating profit after
taxes and the accounting profit.
Answer: FALSE
Diff: 2
Topic: NPV and Economic Value Added
Learning Obj.: LG 3
29
14) The NPV of a project is the difference between an investment's net operating profit after
taxes and the cost of funds used to finance the investment, which is found by multiplying the
dollar amount of the funds used to finance the investment by the firm's weighted average cost of
capital.
Answer: FALSE
Diff: 2
Topic: NPV and Economic Value Added
Learning Obj.: LG 3
15) Which of the following is an advantage of NPV?

A) It measures the risk exposure.
B) It takes into account the time value of investors' money.
C) It is highly sensitive to the discount rates.
D) It measures how quickly a firm can breakeven.
Answer: B
Diff: 1
Learning Obj.: LG 3
16) The minimum return that must be earned on a project in order to leave the firm's value
unchanged is ________.
A) the internal rate of return
B) the interest rate
C) the cost of capital
D) the compound rate
Answer: C
Diff: 1
Learning Obj.: LG 3
30
17) A firm can accept a project with a net present value of zero because ________.
A) the project would maintain the wealth of the firm's owners
B) the project would enhance the wealth of the firm's owners
C) the project would maintain the earnings of the firm
D) the project would enhance the earnings of the firm
Answer: A
Diff: 1
Learning Obj.: LG 3
18) A firm is evaluating an investment proposal which has an initial investment of $5,000 and
cash flows presently valued at $4,000. The net present value of the investment is ________.
A) -$1,000
B) $9,000
C) $4,000
D) -$4,000
Answer: A
Diff: 1
Learning Obj.: LG 3
19) What is the NPV for a project whose cost of capital is 15 percent and initial after-tax cost is
$5,000,000 and is expected to provide after-tax operating cash inflows of $1,800,000 in year 1,
$1,900,000 in year 2, $1,700,000 in year 3, and $1,300,000 in year 4?
A) $1,700,000
B) $371,764
C) -$137,053
D) -$4,862,947
Answer: C
Diff: 2
Learning Obj.: LG 3
31
20) What is the NPV for a project if its cost of capital is 0 percent and its initial after-tax cost is
$5,000,000 and it is expected to provide after-tax operating cash inflows of $1,800,000 in year 1,
$1,900,000 in year 2, $1,700,000 in year 3, and $1,300,000 in year 4?
A) $1,700,000
B) $371,764
C) $137,053
D) $6,700,000
Answer: A
Diff: 2
Learning Obj.: LG 3
21) What is the NPV for a project if its cost of capital is 12 percent and its initial after-tax cost is
$5,000,000 and it is expected to provide after-tax operating cash flows of $1,800,000 in year 1,
$1,900,000 in year 2, $1,700,000 in year 3, and ($1,300,000) in year 4?
A) -$1,494,336
B) $158,011
C) -$158,011
D) $3,505,664
Answer: A
Diff: 2
Learning Obj.: LG 3
32
22) A firm is evaluating three capital projects. The net present values for the projects are as
follows:
The firm should ________.

A) accept Projects 1 and 2, and reject Project 3
B) accept Projects 1 and 3, and reject Project 2
C) accept Project 3, and reject Projects 1 and 2
D) accept all projects
Answer: A
Diff: 1
Learning Obj.: LG 3
23) What is the profitability index of a project that has an initial cash outflow of $600, an inflow
of $250 for the next 3 years and a cost of capital of 10 percent?
A) 0.667
B) 2.036
C) 1.036
D) 2.739
Answer: C
Diff: 2
Topic: NPV and the Profitability Index
Learning Obj.: LG 3
33
Table 10.1
24) Given the information in Table 10.1 and 15 percent cost of capital,
(a) compute the net present value.
(b) should the project be accepted?
Answer:
(a) NPV = (1,000 / 0.15) × [1 - 1 / (1.15)5] - 2,500
= 1,000 × (3.352) - 2,500 = $852
(b) Since NPV > 0, the project should be accepted.
Diff: 3
Learning Obj.: LG 3
34
Table 10.2
25) Given the information in Table 10.2 and 15 percent cost of capital,
(a) compute the net present value.
(b) should the project be accepted?
Answer:
(a)
NPV = $98,820 - $100,000 = -$1,180 < 0

(b) Since NPV < 0, the project should be rejected.
Diff: 3
Learning Obj.: LG 3
10.4 Calculate, interpret, and evaluate the internal rate of return (IRR).
1) The internal rate of return (IRR) is defined as the discount rate that equates the net present
value with the initial investment associated with a project.
Answer: FALSE
Diff: 1
Topic: Internal Rate of Return (IRR)
Learning Obj.: LG 4
35
2) The IRR is the discount rate that equates the NPV of an investment opportunity with $0.
Answer: TRUE
Diff: 1
Learning Obj.: LG 4
3) The IRR is the compounded annual rate of return that a firm will earn if it invests in a project
and receives the estimated cash inflows.
Answer: TRUE
Diff: 1
Learning Obj.: LG 4
4) An internal rate of return greater than the cost of capital guarantees that the firm will earn at
least its required return.
Answer: TRUE
Diff: 1
Learning Obj.: LG 4
5) A sophisticated capital budgeting technique that can be computed by solving for the discount
rate that equates the present value of a project's inflows to the present value of its outflows is
called net present value.
Answer: FALSE
Diff: 1
Learning Obj.: LG 4
36
6) A sophisticated capital budgeting technique that can be computed by solving for the discount
rate that equates the present value of a project's inflows to the present value of its outflows is
called internal rate of return.
Answer: TRUE
Diff: 1
Learning Obj.: LG 4
7) If a project's IRR is greater than zero, the project should be accepted.

Answer: FALSE
Diff: 1
Learning Obj.: LG 4
8) If a project's IRR is greater than 0 percent, the project should be accepted.

Answer: FALSE
Diff: 1
Learning Obj.: LG 4
9) If a project's IRR is greater than the cost of capital, the project should be rejected.
Answer: FALSE
Diff: 1
Learning Obj.: LG 4
37
10) What is the IRR for the following project if its initial after-tax cost is $5,000,000 and it is
expected to provide after-tax operating cash inflows of $1,800,000 in year 1, $1,900,000 in year
2, $1,700,000 in year 3, and $1,300,000 in year 4?
A) 15.57%
B) 0.00%
C) 13.57%
D) 12.25%
Answer: C
Diff: 2
Learning Obj.: LG 4
11) What is the IRR for the following project if its initial after-tax cost is $5,000,000 and it is
expected to provide after-tax operating cash flows of ($1,800,000) in year 1, $2,900,000 in year
2, $2,700,000 in year 3, and $2,300,000 in year 4?
A) 5.83%
B) 9.67%
C) 11.44%
D) 6.85%
Answer: A
Diff: 2
Learning Obj.: LG 4
10.5 Use net present value profiles to compare NPV and IRR techniques.
1) A project's net present value profile is a graph that plots a project's NPV for various discount
rates.
Answer: TRUE
Diff: 1
Topic: Comparing NPV and IRR Techniques
Learning Obj.: LG 5
38
2) A project's net present value profile is a graph that plots a project's IRR for various discount
rates.
Answer: FALSE
Diff: 1
Learning Obj.: LG 5
3) Net present value profiles are most useful when selecting among independent projects.
Answer: FALSE
Diff: 1
Topic: Net Present Value Profiles
Learning Obj.: LG 5
4) For conventional projects, both NPV and IRR techniques will always generate the same
accept-reject decision.
Answer: FALSE
Diff: 1
Topic: Conflicting Rankings
Learning Obj.: LG 5
5) The IRR method assumes the cash flows are reinvested at the internal rate of return rather than
the required rate of return.
Answer: TRUE
Diff: 1
Learning Obj.: LG 5
6) Net present value profiles are most useful when selecting among mutually exclusive projects.
Answer: TRUE
Diff: 1
Learning Obj.: LG 5
39
7) Consider the following projects, X and Y, where the firm can only choose one. Project X costs
$600 and has cash flows of $400 in each of the next 2 years. Project Y also costs $600, and
generates cash flows of $500 and $275 for the next 2 years, respectively. Which investment
should the firm choose if the cost of capital is 10 percent?
A) Project X, since it has a higher NPV than Project Y
B) Project Y, since it has a higher NPV than Project X
C) Project X, since it has a lower NPV than Project Y
D) Project Y, since it has a lower NPV than Project X
Answer: A
Diff: 2
Learning Obj.: LG 5
8) Consider the following projects, X and Y where the firm can only choose one. Project X costs
$600 and has cash flows of $400 in each of the next 2 years. Project Y also costs $600, and
generates cash flows of $500 and $275 for the next 2 years, respectively. Which investment
should the firm choose if the cost of capital is 25 percent?
A) Project X, since it has a higher NPV than Project Y
B) Project Y, since it has a higher NPV than Project X
C) neither, since both the projects have negative NPV
D) neither, since both the projects have positive NPV
Answer: C
Diff: 2
Learning Obj.: LG 5
9) Which of the following is true of NPV profile?

A) It is used for evaluating and comparing independent projects when conflicting ranking exists.
B) It is a graph that illustrates a project's IRR against various values of NPV.
C) It shows an inverse relationship between a project's IRR and NPV.
D) It charts the net present value of a project as a function of the cost of capital.
Answer: D
Diff: 2
Learning Obj.: LG 5
40
10) Tangshan Mining Company is considering investing in a new mining project. The firm's cost
of capital is 12 percent and the project is expected to have an initial after-tax cost of $5,000,000.
Furthermore, the project is expected to provide after-tax operating cash flows of $2,500,000 in
year 1, $2,300,000 in year 2, $2,200,000 in year 3, and ($1,300,000) in year 4?
(a) Calculate the project's NPV.
(b) Calculate the project's IRR.
(c) Should the firm make the investment?
Answer:
No, the firm should not accept the project since it provides negative NPV.
Diff: 3
Learning Obj.: LG 5
10.6 Discuss NPV and IRR in terms of conflicting rankings and the theoretical and practical
strengths of each approach.
1) Conflicting rankings in the case of mutually exclusive projects using NPV and IRR often
result from differences in the magnitude and/or timing of cash flows.
Answer: TRUE
Diff: 1
Learning Obj.: LG 6
2) Net present value (NPV) assumes that intermediate cash inflows are reinvested at the cost of
capital, whereas internal rate of return (IRR) assumes that intermediate cash inflows can be
reinvested at a rate equal to the project's IRR.
Answer: TRUE
Diff: 1
Learning Obj.: LG 6
41
3) Projects having higher cash inflows in the early years tend to be less sensitive to changes in
the cost of capital and are therefore often acceptable at higher discount rates compared to
projects with higher cash inflows that occur in the later years.
Answer: TRUE
Diff: 2
Learning Obj.: LG 6
4) In general, projects with similar-sized investments and lower cash inflows in the early years
tend to be preferred at higher discount rates.
Answer: FALSE
Diff: 1
Learning Obj.: LG 6
5) In general, the greater the difference between the magnitude and/or timing of cash inflows, the
greater the likelihood of conflicting ranking between NPV and IRR.
Answer: TRUE
Diff: 1
Learning Obj.: LG 6
6) Although differences in the magnitude and timing of cash flows explain conflicting rankings
under the NPV and IRR techniques, the underlying cause is the implicit assumption concerning
the reinvestment of intermediate cash inflows.
Answer: TRUE
Diff: 1
Learning Obj.: LG 6
42
7) On a purely theoretical basis, NPV is the better approach to capital budgeting than IRR
because NPV implicitly assumes that any intermediate cash inflows generated by an investment
are reinvested at the firm's cost of capital.
Answer: TRUE
Diff: 1
Topic: Which Approach Is Better?
Learning Obj.: LG 6
8) On a purely theoretical basis, IRR is the better approach to capital budgeting than NPV
because IRR implicitly assumes that any intermediate cash inflows generated by an investment
are reinvested at the firm's cost of capital.
Answer: FALSE
Diff: 1
Learning Obj.: LG 6
9) Certain mathematical properties may cause a project with a nonconventional cash flow pattern
to have multiple IRRs; this problem does not occur with the NPV approach.
Answer: TRUE
Diff: 1
Learning Obj.: LG 6
10) On a purely theoretical basis, NPV is preferred over IRR because NPV assumes a more
conservative reinvestment rate and does not exhibit the mathematical problem of multiple IRRs
that often occurs when IRRs are calculated for nonconventional cash flows.
Answer: TRUE
Diff: 1
Learning Obj.: LG 6
43
11) The internal rate of return assumes that a project's intermediate cash inflows are reinvested at
a rate equal to the firm's cost of capital.
Answer: FALSE
Diff: 1
Learning Obj.: LG 6
12) On a purely theoretical basis, NPV is a better approach when selecting among two mutually
exclusive projects.
Answer: TRUE
Diff: 1
Learning Obj.: LG 6
13) On a purely theoretical basis, IRR is a better approach when selecting among two mutually
exclusive projects.
Answer: FALSE
Diff: 1
Learning Obj.: LG 6
14) The appeal of the IRR technique is due to the general disposition of business people to think
in terms of rates of return rather than actual dollar returns.
Answer: TRUE
Diff: 1
Learning Obj.: LG 6
44
15) The financial decision makers find NPV more intuitive because it measures benefits relative
to the amount invested.
Answer: FALSE
Diff: 1
Learning Obj.: LG 6
16) The ________ is the discount rate that equates the present value of the cash inflows with the
initial investment.
A) payback period
B) net present value
C) cost of capital
D) internal rate of return
Answer: D
Diff: 1
Learning Obj.: LG 6
17) The ________ is the compound annual rate of return that a firm will earn if it invests in the
project and receives the given cash inflows.
A) risk-free rate
C) opportunity cost
D) cost of capital
Answer: B
Diff: 1
Learning Obj.: LG 6
45
18) A firm with a cost of capital of 13 percent is evaluating three capital projects. The internal
rates of return are as follows:
The firm should ________.

A) accept Project 1 and 2, and reject Project 3
B) accept Project 2, and reject Projects 1 and 3
C) accept Project 1, and reject Projects 2 and 3
D) accept Project 3, and reject Projects 1 and 2
Answer: B
Diff: 1
Learning Obj.: LG 6
Table 10.3
A firm is evaluating two projects that are mutually exclusive with initial investments and cash
flows as follows:
19) If the firm in Table 10.3 has a required payback of two years, it should ________.
A) accept Project A and Project B
B) accept Project A and reject Project B
C) reject Project A and accept Project B
D) reject both the projects
Answer: B
Diff: 2
Learning Obj.: LG 6
46
20) The new financial analyst does not like the payback approach (Table 10.3) and determines
that the firm's required rate of return is 15 percent. Based on IRR, his recommendation would be
to ________.
A) accept both the projects
B) accept Project A and reject Project B
C) reject Project A and accept Project B
D) reject both the projects
Answer: C
Diff: 2
Learning Obj.: LG 6
Table 10.4
A firm must choose from six capital budgeting proposals outlined below. The firm is subject to
capital rationing and has a capital budget of $1,000,000; the firm's cost of capital is 15 percent.
21) Using the internal rate of return approach to ranking projects, which project(s) should the
firm accept? (See Table 10.4)
A) 1, 2, 3, 4, and 5
B) 1, 2, 3, and 5
C) 2, 3, 4, and 6
D) 1, 3, 4, and 6
Answer: B
Diff: 2
Learning Obj.: LG 6
47
22) Using the net present value approach to ranking projects, which projects should the firm
accept? (See Table 10.4)
A) 1, 2, 3, 4, and 5
B) 1, 2, 3, 5, and 6
C) 2, 3, 4, and 5
D) 1, 3, 4, 5, and 6
Answer: B
Diff: 2
Learning Obj.: LG 6
23) When the net present value is negative, the internal rate of return is ________ the cost of
capital.
A) greater than
B) greater than or equal to
C) less than
D) equal to
Answer: C
Diff: 2
Learning Obj.: LG 6
24) A firm is evaluating two independent projects utilizing the internal rate of return technique.
Project X has an initial investment of $80,000 and cash inflows at the end of each of the next five
years of $25,000. Project Z has an initial investment of $120,000 and cash inflows at the end of
each of the next four years of $40,000. The firm should ________.
A) accept both the projects because they have equal IRR
B) accept Project Y because its IRR is higher than Project Z
C) accept Project Z because its IRR is higher than Project X
D) reject both the projects because they have negative IRR
Answer: B
Diff: 2
Learning Obj.: LG 6
48
25) Comparing net present value and internal rate of return ________.
A) always results in the same ranking of projects
B) always results in the same accept-reject decision
C) may give different accept-reject decisions
D) is only necessary on independent projects
Answer: C
Diff: 2
Learning Obj.: LG 6
26) Unlike the net present value criteria, the internal rate of return approach assumes a
reinvestment rate equal to ________.
A) the relevant cost of capital
B) the project's internal rate of return
C) the project's opportunity cost
D) the market's interest rate
Answer: B
Diff: 2
Learning Obj.: LG 6
27) When evaluating projects using NPV approach, ________.

A) projects having lower early-year cash flows tend to be preferred at higher discount rates
B) projects having higher early-year cash flows tend to be preferred at higher discount rates
C) projects having higher early-year cash flows tend to be preferred at lower discount rates
D) the discount rate and magnitude of cash flows do not affect the ranking by NPV approach
Answer: B
Diff: 2
Learning Obj.: LG 6
49
28) Which capital budgeting method is most useful for evaluating a project that has an initial
after-tax cost of $5,000,000 and is expected to provide after-tax operating cash flows of
$1,800,000 in year 1, ($2,900,000) in year 2, $2,700,000 in year 3, and $2,300,000 in year 4?
A) net present value
C) payback
D) accounting rate of return
Answer: A
Diff: 2
Learning Obj.: LG 6
29) The underlying cause of conflicts in ranking for projects by internal rate of return and net
present value methods is ________.
A) the reinvestment rate assumption regarding intermediate cash flows
B) that neither method explicitly considers the time value of money
C) the assumption made by the IRR method that cash inflows are spread equally throughout the
timeline
D) that NPV approach favors small projects with high returns
Answer: A
Diff: 2
Learning Obj.: LG 6
30) Which of the following is a reason that makes NPV a better approach to capital budgeting on
a purely theoretical basis?
A) It measures the benefits relative to the relative amount invested.
B) The reinvestment rate assumed by this method is reasonable.
C) Financial decision makers are inclined to higher rates of return.
D) Interest rates are expressed as annual rates of return.
Answer: B
Diff: 2
Learning Obj.: LG 6
50
31) In comparing the internal rate of return and net present value methods of evaluation,
________.
A) internal rate of return is theoretically superior, but financial managers prefer net present value
B) net present value is theoretically superior, but financial managers prefer to use internal rate of
return
C) financial managers prefer net present value, because it is presented as a rate of return
D) financial managers prefer net present value, because it measures benefits relative to the
amount invested
Answer: B
Diff: 2
Learning Obj.: LG 6
Table 10.5
Galaxy Satellite Co. is attempting to select the best group of independent projects competing for
the firm's fixed capital budget of $10,000,000. Any unused portion of this budget will earn less
than its 20 percent cost of capital. A summary of key data about the proposed projects follows.
32) Use the NPV approach to select the best group of projects. (See Table 10.5)
Answer: Choose Projects C and D, since this combination maximizes NPV at $410,000 and only
requires $8,000,000 of initial investment.
Diff: 2
Learning Obj.: LG 6
51
33) Use the IRR approach to select the best group of projects, if the required rate of return is
23.5%. (See Table 10.5)
Answer: IRR Approach
Choose Projects B and C, resulting in a NPV of $380,000.

Diff: 2
Learning Obj.: LG 6
34) Which projects should the firm implement? (See Table 10.5)
Answer: Projects C and D
Diff: 2
Learning Obj.: LG 6
52
35) Consider the following projects, X and Y where the firm can only choose one. Project X
costs $600 and has cash flows of $400 in each of the next 2 years. Project Y also costs $600, and
generates cash flows of $500 and $275 for the next 2 years, respectively. Sketch a net present
value profile for each of these projects. Which project should the firm choose if the cost of
capital is 10 percent? What if the cost of capital is 25 percent? Show all work.
Answer:
At a cost of capital of 10 percent, the firm would choose Project X. At a cost of capital of 25
percent, the firm would choose neither of the projects.
Diff: 3
Learning Obj.: LG 6
53
Another random document with
no related content on Scribd:
The Project Gutenberg eBook of Saaren Helmin
kunnia
This ebook is for the use of anyone anywhere in the United States
and most other parts of the world at no cost and with almost no
restrictions whatsoever. You may copy it, give it away or re-use it
under the terms of the Project Gutenberg License included with this
ebook or online at www.gutenberg.org. If you are not located in the
United States, you will have to check the laws of the country where
you are located before using this eBook.
Title: Saaren Helmin kunnia

Romaani
Author: Juho Koskimaa
Release date: April 10, 2024 [eBook #73367]
Language: Finnish
Original publication: Jyväskylä: K. J. Gummerus, 1924
Credits: Juhani Kärkkäinen and Tapio Riikonen
*** START OF THE PROJECT GUTENBERG EBOOK SAAREN

HELMIN KUNNIA ***
SAAREN HELMIN KUNNIA
Romaani
Kirj.
JUHO KOSKIMAA
Jyväskylässä, K. J. Gummerus Osakeyhtiö, 1924.

I
Saaren Juhani-isäntä palaa päärakennukseen. Tuvan portailla hän

hetkeksi pysähtyy ja katselee ympärilleen aivan kuin aikoisi hän
palata takaisin, mutta tekeekin sitten päätöksensä, avaa oven ja käy
huoneeseen.
Askeleet, jotka hän tänä varhaisena aamuhetkenä on ottanut, ovat

raskaimmat, mitkä hän muistaa käyneensä. Hän on haudannut
isänsä ja äitinsä, ja hän on saattanut hautaan vanhimman poikansa
ja vanhimman tyttärensä, mutta ne askeleet, jotka hän silloin otti, ne
on kunkin jälkeen jäävän aikanaan otettava ja niissä oli sentään
jotakin lohtua, ryhtiä ja syrjäistenkin myötätuntoa mukana.
Mutta nämä askeleet tuvasta aitan ovelle! Vaikkei syrjäinen

koskaan saisikaan niistä tietää, niin hän ne kuitenkin tietäisi.
Saaren Juhani istahtaa tuvan penkille ja painaa päänsä käsiinsä.

Aurinko on jo korkealla eikä hän huomaa, että emäntäpiian silmät
uteliaasti tirkistelevät häntä vuode-uudinten raosta.
Kuinka hän juuri tänä yönä tuli valvoneeksi ja kuinka hänessä juuri
nyt oli herännyt epäilys, epäilys, johon ei ulkonaisesti katsoen ollut
pienintäkään aihetta.
Keväällä otetaan taloon lisäväkeä niinkuin jokaisessa
suuremmassa talossa on pakko tehdä. Siinä on tarjolla myöskin
muuan Sarkan Nikolai, ruskeasilmäinen ja surunvoittoiselta
vaikuttava, mutta työtätekevän näköinen mies. Eikö hän
mahdollisesti kelpaisi? Mikäpä siinä, kun vain palkoissa sovitaan,
onhan se riskin ja pulskan näköinen mies.
Ja mies tyytyy vähään ja jää. Kun Saaren Juhani nyt häntä

ajattelee, ei hän muista hänessä mitään moittimisen syytä. Ei se
kulje iltamissa eikä tanssipaikoissa kuin joskus, kitkuttaa vaan
toisten hanuria, milloin sattuu saamaan sellaisen käsiinsä tai hyräilee
laulunpäitä. Väliin Saaren isäntä tulee ajatelleeksi, että hän pestaa
hänet koko talveksi.
Mutta samalla hän huomaa jotakin muutakin. Helmikin, hänen

ainoa lapsensa, käy totiseksi ja vakavaksi, kulkee omissa
mietteissään ja jää pois sieltä, niissä huvitellaan ja missä peli ja
musiikki soivat. Tai jos niihin meneekin, menee kuin pakosta,
muodon vuoksi, ja aivan kuin jotakin peittääkseen. Saaren Juhani on
harras ja uskonnollinen mies eikä hänellä ole mitään sitä vastaan,
vaikka kaikki seurantalot ja huvipaikat jäisivät kerrassaan autioiksi,
mutta Helmin menettelyn takana hän vainuaa jotakin
asiaankuulumatonta. Ja hän väijyy ja vaanii, muttei huomaa sen
kummempaa: Helmi käy entistäkin nöyremmäksi ja Sarkan Niku
tekee työtä kahden edestä. Eihän hän, Saaren Juhani, voi näillä
edellytyksillä ottaa asiaa edes puheeksikaan.
Kunnes hän nyt, tänä yönä, tapaa tuon miehen tyttärensä aitasta.
*****
Kun Saaren Juhani tulee tähän kohtaan mietteissänsä kohottaa
hän päänsä. Miehestä puhutaan, että se on niitä ryssäin tekemiä, ja
hän tapaa sen tyttärensä aitasta. Mutta hän ei silti kiivastu eikä
heittäydy julmistuneeksi. Hän sanoo vain miehelle, että tässä ovat
tavarasi ja litviikkisi ja nyt on paras lähteä. Niin, hän menee vieläkin
pitemmälle, hän sanoo tyttärelleen ja sille miehelle, että teillä on
puoli tuntia aikaa keskustellaksenne, sillä te ette koskaan enää tule
näkemään toisianne.
Ja nyt hän istuu täällä, tuvan sivupenkillä, ja odottelee Helmiä,

tytärtään.
*****
Aurinko nousee ja aika kuluu, mutta Saaren Juhani-isäntä sitä ei

huomaa. Joskus hän vilkaisee kelloansa, mutta ajatuksen voima on
turtunut aivan kuin joku kesken kaikkea olisi tullut ja lyönyt häntä
vasten kasvoja: sellainen on kaikkien mahdollisten olettamusten
ulkopuolella.
Emäntäpiikakin on siinä välissä noussut vuoteeltaan, käynyt

aitoissa karhaamassa muita hereille ja pannut kahvipannun tulelle.
Hän katselee kummissaan isäntää, joka on siinä tuntikausia istunut
tuvan sivupenkillä, muttei puhu mitään. Mitäpä hänellä olisikaan
isännälle sanomista.
Väki alkaa yksitellen lappautua sisälle, mutta Helmiä ei kuulu.
"Tulee viimmeisenä niinkuin aina muulloinkin", ajattelee Saaren

Juhani.
"Niin oikein, niin oikein. Väki ei saa mitään huomata."
Ja hän istuu siinä yhä ja sytyttää jo sikarinkin.
"Kun ei Nikua vielä kuulu", sanoo emäntäpiika kaataessaan kahvia

kuppeihin.
Saaren Juhani otti sikarin hampaistaan.
"Ei", pääsi häneltä, "se lähti jo illalla. Tuli äkkiä sille tuulelle."
"Vai tuli! Kun ei se meille mitään puhunut."
"Hm. Kun ei puhunut, niin ei puhunut. Minkäs minä sille mahdan."
Eikä siitä asiasta sen enempää virkattu. Saaren isäntä imee taas
sikariaan. Hän tietää kyllä, että väki kernaastikin tekisi
lisäkysymyksiä, mutta se on nyt vain väki ja hänellä on muutakin
ajattelemista.
Tuolla, esimerkiksi, muutaman seinän takana nukkuu hänen

vaimonsa, Saaren talon emäntä. Kertoako hänelle kaikki se, mitä on
nähnyt ja minkä tietää vai ollako kertomatta? Ja tytär tietysti istuu
aitassaan ja vetistelee. Mutta kumpaa hän itkee, sitäkö, että on
murehduttanut isänsä mielen, vai sitäkö, että Sarkan Nikolai
lähetettiin menemään? Ja uskaltaako hän ylimalkaan tulla huoneisiin
ollenkaan.
*****
Väet alkavat jo mennä ulos. Saaren isäntä ei hievahdakaan

paikaltaan ei antaakseen määräyksiä eikä muutenkaan. Hän istuu
paikallaan kuin naulittu, mutta hän tuntee, että hänen ajatuksensa
alkavat saada varmoja suuntaviivoja, että hän aivan kuin herää
ensimmäisestä lyövästä ällistyksestään ja että hän selvemmin näkee
suuren kokonaisuuden. Ja samalla kun hän melkein itsetiedottomasti
alkaa suunnitella toimenpiteitä tulevaisuutta varten, alkaa hänessä
myöskin herätä joitakin tunteita. Hänen kasvonsa värähtävät ja
hänen ohimosuonensa pullistuvat, mutta tapahtuuko se vihasta vaiko
tuskasta, sitä hän ei tiedä. Häpeä on joka tapauksessa käynyt
Saaren talossa.
Samassa ovi avautuu ja Helmi tulee sisälle.

II
Saaren isäntä kohottaa katseensa ja hän tuntee, että silmät

kipenöivät ja että veri alkaa nousta kasvoihin. Mutta hampaat
pureutuvat yhä tiukemmin sikarin päähän, savut käyvät yhä
sakeammiksi ja suu vaikenee. Vain katse seuraa tyttären liikkeitä ja
kasvojen ilmeitä.
Helmi seisahtuu oven suuhun ja tarkastelee, onko tuvassa muita

kuin isä. Sitten hän menee tyynesti kaatamaan itselleen kahvia ja
istuutuu pöydän alapäähän. Hänen kasvonsa ovat kalpeat ja sen
näköiset, kuin hän äskettäin olisi itkenyt, mutta muuten niillä on
rauhallinen, miltei iloinen ilme. Aivan kuin hän olisi vapautunut
raskaasta taakasta ja aivan kuin hän olisi nyt valmis kestämään, tuli
mitä tuli.
Ja Saaren Juhani nouseekin penkiltään. Sikari heitetään lattiaan,

suu avautuu, huulet värähtävät ja kädet puristautuvat nyrkkiin, mutta
samalla hän taas painuu istumaan ja raskas huokaus tunkeutuu
esiin:
"Voi taivaallinen isä! Tätä minä en toki luullut ansainneeni."

Enempää hän ei sillä kertaa sano eikä tytär kuule edes sitäkään.
Mutta yhtäkkiä hän huomaa, kuinka isä on käynyt vanhaksi ja hiukan
kumaraksikin, kahvikupillinen jää kesken ja hän luo puoleksi
pelästyneen, puoleksi rukoilevan ja kysyvän katseen isäänsä.
"En minä uskonut, että minun pitäisi näitä askeleita ottaa sinun
takiasi eikä miettiä näitä ajatuksia."
Niin on moni muukin vanhin saanut sanoa lapselleen ja Helmi on

valmistautunut niitä vastaanottamaan. Nyt ne tulivat. Eikä hänellä
ollut mitään vastaamista.
Pitkiä hetkiä kuluu hiljaisuudessa. Helmi yrittää jotakin toimitella,

ettei tunnelma kävisi liian raskaaksi, mutta isän katse pakottaa hänet
tuon tuostakin pysähtymään. Joskus hän on aikeissa mennä ulos ja
sinne jäädä, mutta oivaltaa, että takaisin tuleminen olisi kaksin
verroin vaikeampaa.
Tuvan seinäkello lyö kahdeksaa, puolen tunnin kuluttua alkaa

ruokakello soida. Emäntäpiika pistäytyy sisällä, katselee hiukan
keittopataa ja menee sitten taas pihalle, jolla meijeriin lähtevät rattaat
kolisevat. Siitä on nyt vain muuan tunti kulunut, kun Nikolai pantiin
lähtemään, mutta Helmistä tuntuu siltä, kuin olisivat siitä iät ja ajat
kuluneet ja kuin edessä olisi jokin aivan uusi ajanjakso uusine
huolineen, vieläpä uusine aurinkoineenkin. Hänen mielialansa käy
tyyneksi ja rauhalliseksi, niinkuin monien ihmisten käy uuden päivän
tullessa.
Mutta tilapäisestä mielenvireestään hän havahtuu hyvinkin pian.

Ensimmäinen renki tulee sisään. Silloin Saaren Juhani nousee,
menee porstuaa kohden ja viittaa Helmiä seuraamaan jälessään.
Liikettä täynnä oleva tupa, jonne kuka hyvänsä ja milloin tahansa
saattaa tulla, ei olekaan oikea paikka perheen keskinäisiä selvittelyjä
varten.
III
Sana rakkaus, mikäli sillä ei ole tekemistä uskonnon ja

uskonnollisuuden kanssa, ei oikein sopeudu käytettäväksi vankan
talonpoikaistalon jykevien seinien sisäpuolella. Siinä ja sen
johdannaisissa on jotakin äitelää ja asiallisista asioista syrjässä
olevaa, jolla ei ole mitään tekemistä arkisen, toimeliaan elämän
kanssa. Riiastellaan aikansa, vähin hyväilläänkin, otetaan pois,
vihitään ja sillä hyvä. Elämä on alkanut. Rakkaus, — se on jotakin
haihattelua, jota kestää aikansa ja joka ei parhaimmassakaan
tapauksessa pääty vallitsevien sääntöjen mukaisesti.
Ja kuitenkin tässä tulee kysymys hiukan siitäkin.
Helmi seuraa isäänsä porstuan läpi. Hän tietää, että tupakamarin

läpi ei mennä senvuoksi, että äiti, joka on kivulloinen, saisi vielä
jonkun hetken levätä rauhassa. Isä ei siis aio nostaa jyräkkää, niin,
eikähän se hänen tapaistaan olekaan. Tekee pitkittä puheitta ja
ratkaisevasti sen, minkä tekee. Voi, Nikolai, nyt saisit olla
näkemässä, mutta sinä harpot jo, tavarasi selässäsi, kaukana
maantiellä.
Saaren Juhani ei istuudu eikä sitä tee Helmikään. Hän pelkää,
mutta samalla hänestä tuntuu kuin olisi hän ikävillä vieraisilla. Hän
on harvoin käynyt tässä huoneessa, jossa on kylmyyttä ja
ummehtuneisuutta eikä hänellä koskaan ole ollut kahdenkeskisiä
puhuttavia isän kanssa.
Viimein Saaren Juhani kääntyy päin tytärtänsä.
"No", sanoo hän, "mitä sinulla oikein on sanomista?"
Hän ei oikein ole itsekään selvillä siitä, miten aloittaisi, mutta

piinallinen ja samalla kertaa ellottavan tunteelliselta vaikuttava
hiljaisuus on käynyt ylivoimaiseksi. Oikeastaan hän oli aikonut kysyä:
"Miten sinun asiasi oikein ovat, tyttö", mutta sekin olisi vaikuttanut
karkealta ja raa'alta ja ehkäpä se — lopultakin — olisi ollut
aiheetontakin. Hän kysyi nyt näin, kuinka kysyi, ja tiesi jo hyvin
edeltäpäin, ettei saisi vastausta.
Eikä sitä tulekaan. Helmin katse on tyyni ja kyyneletön, hän

puristaa huulensa yhteen ja hypistelee vain vaatteitansa. Miten
sellaiseen kysymykseen yhtäkkiä osaisi vastata!
"Kuinka sinä oikein tulit päästäneeksi sen sisälle?" tuli toisen

kerran.
Tähän kysymykseen on jo helpompi vastata. Helmi kokoaa kaiken

rohkeutensa ja vastaa:
"Minä rakastin häntä!"
Saaren Juhani pysähtyy kulussaan ja luo tyttäreensä pitkän,

tuijottavan katseen.
"Että mitä sinä teit?" kysyy hän, aivan kuin ei olisi kuullut oikein tai
kuin ei hän olisi uskonut korviaan.
"Rakastin", kuuluu toistamiseen tyynesti ja järkähtämättömästi.
Ensi kerran vuosikymmeniin kuulee Saaren isäntä tämän sanan

tässä yhteydessä ja hän pysähtyy miettimään. Niin, sellaista kai se
oli, se maallinen rakkaus, ja tästä hän johtuu ajattelemaan omaa, jo
kauan sitten mennyttä nuoruuttaan ja sen eri vaiheita. Ei, ei voinut
hänkään väittää, että hänen omatuntonsa siihen aikaan niin puhdas
ja klaari oli ollut, joskin hän myöhemmin oli tullut uskovaiseksi. Se
kai, se sen aikainen, oli myöskin ollut yhtä lajia rakkautta. — Ja ne
karvaat sanat, jotka hän oli aikonut tyttärelleen sanoa, jäivät
sanomatta.
"Oliko se nyt sitten mukamas oikeata rakkautta", kysyi hän tylysti,

"vai oliko se vain kiimaa?"
Helmi säpsähtää, punastuu ja luo katseensa maahan, hän ei ollut

koskaan ajatellut, että isä osaisi tehdä tällaisia kysymyksiä. Mutta
Saaren Juhani ei vastausta odottanutkaan.
"Olipa tuo kumpaa tahansa", jatkoi hän, "niin pitäisihän sinun älytä,
että mikä ei käy, se ei käy. Uppo-outo mies tulee taloon. Emme tiedä,
mistä hän tulee ja minne hän menee, suihkeita vain kuulemme
kaikenlaisia. Ja tämä alkaa viettää öitä vieressäsi, ellei jo
muutenkin…"
Saaren Juhanin ohimosuonet pullistuvat taas, mutta hän vaikenee

hetkisen, hillitsee itsensä ja jatkaa:
"Vaikkenhän minä mikään ihmisten sortteeraaja ole. Paikallaan-
asuja tai kulkijain, tilallinen tai tilaton, rikas tai köyhä, — yhtä hyviä
saattavat silti olla. En minä kiellä, etteikö tämä näyttänyt siivolta
mieheltä, ja hyvä työmies se ainakin oli. Mutta sittenkin… me,
vanhemmat ja talo, merkitsemme myöskin jotakin. Minkälaiset
puheet teillä viimeksi oli?"
"Me rakastamme toisiamme."
Jo kolmannen kerran sama asia. Saaren Juhani naurahti.
"Sinua rakastaisi, niinkuin sanot, niin moni muukin — tavaran

tähden."
"Se lupasi hakea vakinaisen työpaikan, laittaa kodin kuntoon ja

tulla minua sitten hakemaan, ellen itse mene."
Värit Saaren isännän kasvoilla vaihtuvat ja hän pysähtyy

kulussaan.
"Niin", sanoi hän vihdoin, "en minä tahdo syöstä sinua

onnettomuuteen. Minun puolestani tee, miten parhaaksi näet:
rakkaushan on luotu kärsimään."
Puhuminen ei ole Saaren Juhanin vahvimpia puolia ja tälle

aamulle sitä on tullut enemmän kuin tavallisesti kuukaudessa. Hän
hiukan häpeää itsekin sanavuolauttaan, mutta toiselta puolen hän
toivoo, että olisi edes tyttärensä kanssa puhellut aikaisemmin ja
useammin.
"Voi tyttö-parka, ellei sinun vaan jo ole käynyt huonosti", pääsee

häneltä.
Eikä hän odota edes vastausta, vaan menee ovea kohden. Mutta
kun hän jo laskee kätensä lukon kahvaan, kysyy hän päätään
kääntämättä:
"Tahdotko sinä, että minä puhun äidillesi?"
"Ei", vastaa Helmi hätäisesti, "ei vielä."
"No ei sitten."
Ovi painuu kiinni ja Helmi vaipuu itkuun. Vasta nyt hän huomaa,
kuinka lähellä tuo yössä vanhentunut vanhus häntä oli ja kuinka hän
häntä rakasti.
IV
Päivän Helmi kulkee kuin unessa eikä saa käydyksi katsomassa

äitiään, joka koko päiväksi jää vuoteeseen. Hän tietää, ettei isä ole
äidille asiasta puhunut, ja tietää myöskin, että jos isä sen tekisi,
seuraisi siitä kohtaus, johon kuuluisi itkua, voivotusta ja viimein kovia
sanoja. Äiti oli tosin sairaalloinen, mutta hänellä olivat silmät auki ja
hän oli tottunut saamaan tahtonsa perille. Ja äiti oli kylläkin harras ja
uskonnollinen, mutta Helmi tiesi, ettei se estänyt häntä epäluulolla
katselemasta ihmisiä, jotka olivat alapuolella talollissäädyn ja sen
lisäksi vielä köyhiä.
Niin kuluu tämä päivä kuin unta nähden. Vaikka vain yksi väestä
on mennyt pois, yksi, joka muutenkaan ei pitänyt ääntä itsestään,
tuntuu sittenkin kuin talossa olisi tullut hiljaisempaa hänen jälkeensä.
Mutta siltä kai tuntuu aina.
Helmi ajattelee poislähtenyttä Nikolaita ja hänen tuskaansa

sekaantuu jotakin riemullista, josta hän ei tiedä, mistä se johtuu.
Olkoon vain, että Nikolai on työmies ja köyhä, mutta se osaa tehdä
ja tekee työtä ja se tulee sitten häntä hakemaan. Samalla kuin Helmi
odottaa iltaa ja yksinäisyyttä, hän sitä vähin pelkääkin.
Pitkältäkin tuntuvan päivän, yksitoikkoisuudessaan rikkaan, täytyy
perältäkin vaihtua illaksi. Pitkin päivää on väki työn lomassa
aprikoinut Sarkan Nikolain äkillistä poislähtemistä. Nyt kun työn
jälkeen kokoonnutaan tupaan käy arvaileminen ja aprikointi
perusteellisemmaksi.
"Ellei hyvinkään viihtynyt", sanoo joku rengeistä. "Ne sellaiset

kulkijaimet, mene ja sano, niistä ei koskaan tiedä, milloin tulevat
lähtöpäälle."
Rieti, joka on ollut talossa kolmisenkymmentä vuotta ja jota vaivaa

ainainen tupakka-yskä ja äänenkäheys, sylkäisee ja ottaa
puhevuoron.
"Ei tämä tyytymätön ollut", virkkoi hän, "kyllä ihmisen naamastakin

näkee, milloin hän on tyytymätön. Vaan ei tämän naama sellaiselta
näyttänyt. Ja hyvä työmies."
Ikäänkuin varmemmaksi vakuudeksi sanoilleen hän sytytti uuden

tupakan, nyökäytti muutaman kerran päätään ja hoki:
"Hyvä työmies se oli, hyvä."
"Ja sellainen tanssija!"
Hilja, joka oli erikoisesti kiinnittänyt huomiota tähän puoleen,

muistelee hengästyneenä Sarkan Nikolain tanssitaitoa ja jatkaa
innostuneena:
"Siltä pojalta se lähti askel kuin luonnosta vaan. Muistatteko, tytöt!

Eikä kukaan ollut opettanut, niin se itse sanoi. Se on niinkuin
veressä, sanoi. Ei sitä olisi uskonut, niin kulki aina kuin mörökölli…"

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Principles of Managerial Finance 15th Edition Zutter

10.1 Understand the key elements of the capital budgeting process.

8) The primary motive for capital expenditures is to refurbish fixed assets.

9) Research and development is considered to be a motive for making capital expenditures.

38) The basic motive for capital expenditure is to ________.

41) The first step in the capital budgeting process is ________.

47) Which of the following is true of the accept-reject approach?

50) Which of the following is an example of a nonconventional pattern of cash flows?

18) Which of the following is an unsophisticated capital budgeting technique?

21) An annuity is ________.

Year Project A Project B

33) Which of the following is a disadvantage of payback period approach?

4) A sophisticated capital budgeting technique that can be computed by subtracting a project's

11) If the NPV is greater than $0, a project should be accepted.

15) Which of the following is an advantage of NPV?

The firm should ________.

NPV = $98,820 - $100,000 = -$1,180 < 0

7) If a project's IRR is greater than zero, the project should be accepted.

8) If a project's IRR is greater than 0 percent, the project should be accepted.

9) Which of the following is true of NPV profile?

The firm should ________.

27) When evaluating projects using NPV approach, ________.

Choose Projects B and C, resulting in a NPV of $380,000.

Title: Saaren Helmin kunnia

Author: Juho Koskimaa

Release date: April 10, 2024 [eBook #73367]

Original publication: Jyväskylä: K. J. Gummerus, 1924

Credits: Juhani Kärkkäinen and Tapio Riikonen

*** START OF THE PROJECT GUTENBERG EBOOK SAAREN

Jyväskylässä, K. J. Gummerus Osakeyhtiö, 1924.

Saaren Juhani-isäntä palaa päärakennukseen. Tuvan portailla hän

Askeleet, jotka hän tänä varhaisena aamuhetkenä on ottanut, ovat

Mutta nämä askeleet tuvasta aitan ovelle! Vaikkei syrjäinen

Saaren Juhani istahtaa tuvan penkille ja painaa päänsä käsiinsä.

Ja mies tyytyy vähään ja jää. Kun Saaren Juhani nyt häntä

Mutta samalla hän huomaa jotakin muutakin. Helmikin, hänen

Ja nyt hän istuu täällä, tuvan sivupenkillä, ja odottelee Helmiä,

Aurinko nousee ja aika kuluu, mutta Saaren Juhani-isäntä sitä ei

Emäntäpiikakin on siinä välissä noussut vuoteeltaan, käynyt

Väki alkaa yksitellen lappautua sisälle, mutta Helmiä ei kuulu.

"Tulee viimmeisenä niinkuin aina muulloinkin", ajattelee Saaren

"Kun ei Nikua vielä kuulu", sanoo emäntäpiika kaataessaan kahvia

Saaren Juhani otti sikarin hampaistaan.

"Vai tuli! Kun ei se meille mitään puhunut."

"Hm. Kun ei puhunut, niin ei puhunut. Minkäs minä sille mahdan."

Tuolla, esimerkiksi, muutaman seinän takana nukkuu hänen

Väet alkavat jo mennä ulos. Saaren isäntä ei hievahdakaan

Samassa ovi avautuu ja Helmi tulee sisälle.

Saaren isäntä kohottaa katseensa ja hän tuntee, että silmät

Helmi seisahtuu oven suuhun ja tarkastelee, onko tuvassa muita

Ja Saaren Juhani nouseekin penkiltään. Sikari heitetään lattiaan,

"Voi taivaallinen isä! Tätä minä en toki luullut ansainneeni."

Niin on moni muukin vanhin saanut sanoa lapselleen ja Helmi on

Pitkiä hetkiä kuluu hiljaisuudessa. Helmi yrittää jotakin toimitella,