Answer:
C. Are readily converted to a known cash amount.
Explanation:
Highly liquid short term assets are those which are ready available for conversion into cash. These are also called Liquid assets. Highly liquid investment are made for short term investment interest revenues.
Answer:
The project to accept is:
e. E
Explanation:
a) Data and Calculations:
Cost of capital = 10%
Mutually Exclusive Projects:
A B C E
Payback (years) 1 5 2 5
IRR 18% 20% 20% 12%
NPV (Millions) $40 $75 $35 $100
b) Project E should be preferred over all the other projects. It has the highest net present value (NPV) and its internal rate of return (IRR) is above the company's cost of capital. It surpasses projects A, B, and C in financial performance terms using time-value of money analysis.