In the capitalization method of appraising, the most difficult step is to:
A: Establish the gross income;
B: Establish the effective gross income;
C: Establish the net income;
D: Select a capitalization rate.
Answer: D: Select a capitalization rate.
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A company is considering a 5-year project with an initial investment of $90,000. Cash inflows will be $30,000 for the first two years and $25,000 for the next 3 years. If the company's required rate of return is 12%, determine its discounted payback.
A) 4.00 years B) 3.60 years C) 4.40 years D) 3.80 years
Which of the following steps will help service firms to increase their quality control?
A) standardizing the service-performance process B) providing complementary services to customers C) giving personnel authority in handling situations D) adopting differential pricing E) cultivating nonpeak demand