Homework Answers
Only true statement is "The payback method ignores the time value of money"
It does not consider all the cash flows hence Statement 2 is incorrect
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Which of the statements below are true for the payback method of evaluating projects? ' The...
Which of the following statements is CORRECT? Assume that the project being considered has normal cash flows, with...
Which of the following statements is CORRECT? Assume that the project being considered has normal cash flows, with one outflow followed by a series of inflows. a. The longer a project's payback period, the more desirable the project is normally considered to be by this criterion. b. One drawback of the payback criterion for evaluating projects is that this method does not properly account for the time value of money. c. If a project's payback is positive, then the project...
Which of the following statements is CORRECT? The internal rate of return method (IRR) is generally...
Which of the following statements is CORRECT? The internal rate of return method (IRR) is generally regarded by academics as being the best single method for evaluating capital budgeting projects. The discounted payback method is generally regarded by academics as being the best single method for evaluating capital budgeting projects. The payback method is generally regarded by academics as being the best single method for evaluating capital budgeting projects. The net present value method (NPV) is generally regarded by academics...
Which one of the following statements is correct?
Question 5Which one of the following statements is correct? 1) The payback period ignores the time value of money. 2) A longer payback period is preferred over a shorter payback period. 3) The payback rule states that you should accept a project if the payback period is less than one year. 4) The payback rule is biased in favor of long-term projects. 5) The payback period considers the timing and amount of all of a project's cash flows. Question 6A firm has $6 Billion in debt...
The payback method of analysis: O has a timing bias. o considers all project cash flows....
The payback method of analysis: O has a timing bias. o considers all project cash flows. O ignores the initial cost. O applies an industry-standard recoupment period. O discounts cash flows.
Question 1 (1 point) The payback method of analysis ignores which one of the following? O...
Question 1 (1 point) The payback method of analysis ignores which one of the following? O 1) Cash flow direction 2) Timing of each cash inflow 3) Arbitrary cutoff point 4) Time value of money 5) Initial cost of an investment
The payback method helps ms establish and identify a maximum acceptable payback period that helps in...
The payback method helps ms establish and identify a maximum acceptable payback period that helps in capital budgeting decisions. There are two versions of the payback method the convention payback method and the discounted payback method Consider the following case Green Caterpillar Garden Supplies Inc. is a small tim, and several of its managers are worried about how soon the firm will be able to recover its initial investment from Project Omega's perted future cash flows. To answer this question...
Generally speaking the payback method for selecting investments should not be used because? A. it ignores...
Generally speaking the payback method for selecting investments should not be used because? A. it ignores the time value of money B. it ignores all cash flows after the payback period C. it is just too simple to be used by smart people like ourselves D. A and B above
11. The payback period The payback method helps firms establish and identify a maximum acceptable payback...
11. The payback period The payback method helps firms establish and identify a maximum acceptable payback period that helps in capital budgeting decisions. There are two versions of the payback method: the conventional payback method and the discounted payback method. Consider the following case: Fuzzy Button Clothing Company is a small firm, and several of its managers are worried about how soon the firm will be able to recover its initial investment from Project Alpha's expected future cash flows. To...
Question 22 of 25 1 Points Which of the following is TRUE? i. We can evaluate...
Question 22 of 25 1 Points Which of the following is TRUE? i. We can evaluate two projects with different timing of cash flows using the IRR rule, ll. The hurdle rate of the IRR rule is arbitrary (random), H. The payback period is the time until the sum of the present value of future cash flows equals the initial investment. I. IRR rule ignores distant cash flows while the NPV rule does not O A. II, III, IV OB.Iv...
The payback method helps firms establish and identify a maximum acceptable payback period that helps in...
The payback method helps firms establish and identify a maximum acceptable payback period that helps in capital budgeting decisions. There are two versions of the payback method: the conventional payback method and the discounted payback method. Consider the following case: Fuzzy Button Clothing Company is a small firm, and several of its managers are worried about how soon the firm will be able to recover its initial investment from Project Delta's expected future cash flows. To answer this question, Fuzzy...
Which of the following statements is CORRECT? Assume that the project being considered has normal cash flows, with one outflow followed by a series of inflows. a. The longer a project's payback period, the more desirable the project is normally considered to be by this criterion. b. One drawback of the payback criterion for evaluating projects is that this method does not properly account for the time value of money. c. If a project's payback is positive, then the project...
Which of the following statements is CORRECT? The internal rate of return method (IRR) is generally regarded by academics as being the best single method for evaluating capital budgeting projects. The discounted payback method is generally regarded by academics as being the best single method for evaluating capital budgeting projects. The payback method is generally regarded by academics as being the best single method for evaluating capital budgeting projects. The net present value method (NPV) is generally regarded by academics...
The payback method of analysis: O has a timing bias. o considers all project cash flows. O ignores the initial cost. O applies an industry-standard recoupment period. O discounts cash flows.
Question 1 (1 point) The payback method of analysis ignores which one of the following? O 1) Cash flow direction 2) Timing of each cash inflow 3) Arbitrary cutoff point 4) Time value of money 5) Initial cost of an investment
The payback method helps ms establish and identify a maximum acceptable payback period that helps in capital budgeting decisions. There are two versions of the payback method the convention payback method and the discounted payback method Consider the following case Green Caterpillar Garden Supplies Inc. is a small tim, and several of its managers are worried about how soon the firm will be able to recover its initial investment from Project Omega's perted future cash flows. To answer this question...
11. The payback period The payback method helps firms establish and identify a maximum acceptable payback period that helps in capital budgeting decisions. There are two versions of the payback method: the conventional payback method and the discounted payback method. Consider the following case: Fuzzy Button Clothing Company is a small firm, and several of its managers are worried about how soon the firm will be able to recover its initial investment from Project Alpha's expected future cash flows. To...
Question 22 of 25 1 Points Which of the following is TRUE? i. We can evaluate two projects with different timing of cash flows using the IRR rule, ll. The hurdle rate of the IRR rule is arbitrary (random), H. The payback period is the time until the sum of the present value of future cash flows equals the initial investment. I. IRR rule ignores distant cash flows while the NPV rule does not O A. II, III, IV OB.Iv...
The payback method helps firms establish and identify a maximum acceptable payback period that helps in capital budgeting decisions. There are two versions of the payback method: the conventional payback method and the discounted payback method. Consider the following case: Fuzzy Button Clothing Company is a small firm, and several of its managers are worried about how soon the firm will be able to recover its initial investment from Project Delta's expected future cash flows. To answer this question, Fuzzy...
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