Homework Answers
Option A PI index =1+NPV/Investment . It represent NPV in
percentage terms.
IRR AAR and MIRR all are represented in percentage terms
but not related to NPV.
Add Answer to:
(2. Which one of the following can be defined as the NPV in percentage terms? A....
Which one of the following indicates that a project is definitely acceptable? A. Profitability index greater than...
Which one of the following indicates that a project is definitely acceptable? A. Profitability index greater than 1.0 B. Negative net present value C. Modified internal rate return that is lower than the requirement D. Zero internal rate of return E. Positive average accounting return
Identify which of the following might be something an NPV Profile might be used for. Check...
Identify which of the following might be something an NPV Profile might be used for. Check all that apply. a. An NPV Profile indicates if there is a conflict between the NPV and the Profitability Index. b. An NPV Profile can indicate which project is the best at a given required rate of return given two mutually exclusive projects. c. An NPV Profile can indicate if a project has more than one internal rate of return. d. An NPV Profile...
14) In a before-tax analysis of a project, which of the following would not affect NPV?...
14) In a before-tax analysis of a project, which of the following would not affect NPV? an increase a change in the estimated scrap value of an asset used solely in the project a change in the expected life of the project a change in the discount rate for the project money already spent on designs for the project in the working capital requirements for the project. a. b. c. d. e. 15) Which of the following ratios gives the...
18. Which of the following is NOT true about the internal rate of return: A) A...
18. Which of the following is NOT true about the internal rate of return: A) A good project is one with IRR greater than the required return. B) IRR is the discount rate that results in a zero net present value for the project. C) Crossover rate for two projects is the IRR of the project with the difference of the cash flows of the two projects.. D) For two projects of the same size, IRR will usually choose the...
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.
1. We can get multiple IRRS when we draw an NPV profile for a project when:...
1. We can get multiple IRRS when we draw an NPV profile for a project when: a. The project is riskless. b. The project requires a large investment. c. The project cash flows are uneven and change in sign. d. The project has a balloon payment. e. The opportunity cost of capital is high. 2. The length of time required for an investment to generate cash flows sufficient to recover its initial cost, without taking into account time value of...
Which one of the following statements is correct? Assume cash flows are conventional. Explain how you...
Which one of the following statements is correct? Assume cash flows are conventional. Explain how you got your answer A. If two projects are mutually exclusive, you should select the project with the shortest payback period. B. The profitability index will be greater than 1.0 when the net present value is negative. C. Projects with conventional cash flows may sometimes have multiple internal rates of return. D. If the required return exceeds IRR, the profitability index will be less than...
select the right answer. Our firm has a capital rationing problem (more independent normal projects then...
select the right answer.
Our firm has a capital rationing problem (more independent normal projects then money to fund them). Which of the following evaluation approaches can be used to help the firm? Only the net present value (NPV). The modified internal rate of return (MIRR), Pl and NPV can be used. Only the internal rate of return (IRR). Any of the time value of money approaches can be used. O The profitability index (PI) and NPV can be used...
Please solve it by hand so that I can understand the steps. 6. A project has...
Please solve it by hand so that I can understand the steps. 6. A project has the following total (or net) after-tax cash flows. ____________________________________________________ Year Total (or net) after-tax cash flow ____________________________________________________ 1 $1,000,000 2 1,500,000 3 2,000,000 4 2,500,000 _______________________________________________________ The required rate of return on the project is 15 percent. The initial investment (or initial cost or initial outlay) of the project is $4,000,000. a) Find the (regular) payback period of...
You have been presented with 6 projects. All projects are 7-year projects. NPV Net present value....
You have been presented with 6 projects. All projects are 7-year projects. NPV Net present value. IRR = internal rate of return. MIRR = modified internal rate of return. PI profitability index. Project F ($18,539) Project G $23,725 Project C $3,327 Project D $8,876 Project B $11,041 Project A $52,715 NPV 18.13% 11.77% 15.24% 43.46% 30.18% 21.71% IRR= 15.84% 12.97% 24.83% 20.12% 14.36% 17.16% MIRR= 0.94 1.12 1.02 1.89 1.44 1.21 Pl- If all projects are independent, which project or...
14) In a before-tax analysis of a project, which of the following would not affect NPV? an increase a change in the estimated scrap value of an asset used solely in the project a change in the expected life of the project a change in the discount rate for the project money already spent on designs for the project in the working capital requirements for the project. a. b. c. d. e. 15) Which of the following ratios gives the...
18. Which of the following is NOT true about the internal rate of return: A) A good project is one with IRR greater than the required return. B) IRR is the discount rate that results in a zero net present value for the project. C) Crossover rate for two projects is the IRR of the project with the difference of the cash flows of the two projects.. D) For two projects of the same size, IRR will usually choose the...
1. We can get multiple IRRS when we draw an NPV profile for a project when: a. The project is riskless. b. The project requires a large investment. c. The project cash flows are uneven and change in sign. d. The project has a balloon payment. e. The opportunity cost of capital is high. 2. The length of time required for an investment to generate cash flows sufficient to recover its initial cost, without taking into account time value of...
select the right answer.
Our firm has a capital rationing problem (more independent normal projects then money to fund them). Which of the following evaluation approaches can be used to help the firm? Only the net present value (NPV). The modified internal rate of return (MIRR), Pl and NPV can be used. Only the internal rate of return (IRR). Any of the time value of money approaches can be used. O The profitability index (PI) and NPV can be used...
You have been presented with 6 projects. All projects are 7-year projects. NPV Net present value. IRR = internal rate of return. MIRR = modified internal rate of return. PI profitability index. Project F ($18,539) Project G $23,725 Project C $3,327 Project D $8,876 Project B $11,041 Project A $52,715 NPV 18.13% 11.77% 15.24% 43.46% 30.18% 21.71% IRR= 15.84% 12.97% 24.83% 20.12% 14.36% 17.16% MIRR= 0.94 1.12 1.02 1.89 1.44 1.21 Pl- If all projects are independent, which project or...
Most questions answered within 3 hours.
-
(Expected rate of return and risk) Carter Inc. is evaluating a
security. Calculate the investment’s expected...
asked 1 hour ago -
What specific indicators can point to lack of progress for
African Americans in American society?
asked 2 hours ago -
1-The Electrons in a beam are moving at 2.7×108 m/s in an
electric field of 15000...
asked 3 hours ago -
A gas tank is a vertical cylinder. It has a radius of 1m, a
height of...
asked 3 hours ago -
Accent Software faces the following conditions. All of these
support Accent’s use of a market-penetration pricing...
asked 4 hours ago -
A mathematically inclined friend emails you the following
instructions: "Meet me in the cafeteria the first...
asked 4 hours ago -
A monopoly sells in two countries . The demand curves in the two
countries are p1...
asked 5 hours ago -
A .15kg rubber ball is bounced off a wall. Before hitting the
wall, the ball moves...
asked 6 hours ago -
A manufacturing company preparing to build a new plant is
considering three potential locations for it....
asked 6 hours ago -
B. If compound Y has approximately the same values of solubility
in toluene as compound X,...
asked 6 hours ago -
Oscar Inc. has inventory in Japan valued at 39,051,000 Yen one
year ago. One year ago...
asked 7 hours ago -
If Canada suffered from "fundamental disequilibrium," and its
government choose not to devalue its currency, a...
asked 7 hours ago