The ___________ decision rule is considered the “best” in theory. A. Payback Method B. Internal Rate...
The ___________ decision rule is considered the “best” in theory.
A. Payback Method
B. Internal Rate of Return
C. Net Present Value
D. Profitability Index
E. All are considered equal depending on the circumstance.
Homework Answers
Answer: Option C is correct.
The Net Present Value (NPV) decision rule is considered the best in
theory because it directly affects the shareholders' wealth.
Positive net present value increases the shareholders' value.
Add Answer to:
The ___________ decision rule is considered the “best” in
theory.
A. Payback Method
B. Internal Rate...
The overall “best” capital budgeting decision method to use is: a. Payback Period b. Discounted Payback...
The overall “best” capital budgeting decision method to use is: a. Payback Period b. Discounted Payback Period c. Net Present Value d. Internal Rate of Return
With non-mutually exclusive projects. a. the payback method will select the best project. b. the net...
With non-mutually exclusive projects. a. the payback method will select the best project. b. the net present value is not acceptable. c. the internal rate of return method will always select the best project. d. the net present value and the internal rate of return methods will accept or reject the same project.
The A) internal rate of returnx B) payback period X C) average accounting returny eD) profitability indexX esho the...
The A) internal rate of returnx B) payback period X C) average accounting returny eD) profitability indexX esho the decision rule is considered the best in principle for capital budgeting. ed net present value abohon omi nu botosiong ga 2. A stock has a constant growth rate of 3.7% and a dividend yield of 2.5%. What is its tota A) 3.7% В) 2.5% C) 6.2% D) 9.25% E) 7.4% abole D2.5 G37 ck period ie les than the required time...
1. Whenever there is a conflict between NPV and another decision rule, you should always use...
1. Whenever there is a conflict between NPV and another decision rule, you should always use NPV. A. True B. False 2. ________ finds one or more companies that specialize in the product or service that we are considering. A. The Objective Approach B. The Pure Play Approach C. The Subjective Approach D. None of the above 3. The required return of bond is best estimated by computing the ________ on the bond. A. Yield-to-maturity B. market value C. Risk...
6. ABC Corp. stock currently sells for $43.76 per share and has a fixed 3 percent...
6. ABC Corp. stock currently sells for $43.76 per share and has a fixed 3 percent dividend growth rate. What was the amount of the last dividend paid if the required rate of return is 9 percent? A) $2.55 B) $2.63 C) $1.31 D) $3.94 E) $4.36 I 7. The A) internal rate of return B) payback period C) average accounting return D) profitability index E) net present value decision rule is considered the best in principle for capital budgeting
-In your own words, discuss the pros and cons of the payback period, discounted payback period,...
-In your own words, discuss the pros and cons of the payback period, discounted payback period, internal rate of return, net present value, and profitability index. -Which method is the best approach to evaluate a project and why? -What is the relationship between IRR and NPV? Do they always result in the same decision? If yes then no further explanation needed and if no then under what circumstances do IRR and NPV results differ?
Contrast the differences between Payback Period, Net Present Value, and Internal Rate of Return in the...
Contrast the differences between Payback Period, Net Present Value, and Internal Rate of Return in the evaluation of projects. For each method, you should describe how the method works, the decision rule when using this method in evaluating an investment, and one (1) drawback of this method.
F a company is in the situation of having unlimited capital funds, the best decision rule, consid...
f a company is in the situation of having unlimited capital funds, the best decision rule, considering only financial factors, is for the company to invest in all projects in which: The payback period is short. The accounting (book) rate of return (ARR) is greater than its current return on invested capital (ROI). The net present value (NPV) is greater than the cost of capital. The internal rate of return (IRR) is greater than zero. The NPV is greater than...
If a company must choose between two mutually exclusive investment projects, the best general method to...
If a company must choose between two mutually exclusive investment projects, the best general method to employ for decision-making purposes is: Cash-flow bailout Cash-flow break-even Net Present value (NPV) Discounted payback Accounting (book) rate of return, based on average investment over the life of each project The profitability index (PI) is calculated as: Net present value (NPV) divided by average investment New present value (NPV) divided by initial investment Average investment divided by net present value (NPV) Initial investment divided...
The internal rate of return is defined as the: A. discount rate that causes the profitability...
The internal rate of return is defined as the: A. discount rate that causes the profitability index for a project to equal zero. B. discount rate which equates the net present value of cash inflows to the net present value of cash outflows to zero. C. maximum rate of return a firm expects to earn on a project. D. rate of return a project will generate if the project in financed solely with internal funds.
The A) internal rate of returnx B) payback period X C) average accounting returny eD) profitability indexX esho the decision rule is considered the best in principle for capital budgeting. ed net present value abohon omi nu botosiong ga 2. A stock has a constant growth rate of 3.7% and a dividend yield of 2.5%. What is its tota A) 3.7% В) 2.5% C) 6.2% D) 9.25% E) 7.4% abole D2.5 G37 ck period ie les than the required time...
6. ABC Corp. stock currently sells for $43.76 per share and has a fixed 3 percent dividend growth rate. What was the amount of the last dividend paid if the required rate of return is 9 percent? A) $2.55 B) $2.63 C) $1.31 D) $3.94 E) $4.36 I 7. The A) internal rate of return B) payback period C) average accounting return D) profitability index E) net present value decision rule is considered the best in principle for capital budgeting
Most questions answered within 3 hours.
-
1- What are 5 general characteristics of Botticelli’s
paintings?
2- Describe 5 important traits of Flemish...
asked 51 minutes ago -
A golfer claims that his average golf score at the course he
plays regularly is less...
asked 1 hour ago -
On May 1, First Bank perfected a security interest in Debtor’s
inventory. On June 1, Bob...
asked 1 hour ago -
A new kind of typhoid shot is being developed by a medical
research team. The old...
asked 3 hours ago -
Write a chemical equation for these reactions. (Use
the lowest possible whole number coefficients.) Include
states-of-matter...
asked 5 hours ago -
For each of the Z-scores below, determine two probabilities
(show four three decimal places): (1) the...
asked 5 hours ago -
Oxidative phosphorylation is achieved through chemiosmotic
coupling, which turns chemical energy into osmotic potential energy
that...
asked 8 hours ago -
Hollywood Shoes would like to maintain their cash account at a
minimum level of $64,000, but...
asked 8 hours ago -
Proteins CtrA-P, DnaA, and GcrA behave similarly to what
molecule in the Eukaryotic Cell Cycle?
asked 8 hours ago -
TRUE OR FALSE
In case of a competitive tender procedure, in the request for
quotation, the...
asked 8 hours ago -
I am a little behind please provide some explanation, will
provide thumbs up.
This question considers...
asked 8 hours ago -
Let say the utility function as U(X,Y) = lnX + Y. Show that the
marginal rate...
asked 8 hours ago