Homework Answers
Net present value is the difference between the present value of cash inflows in the present value of cash outflows. If the net present value is positive then the project should be accepted.
NPV is positive
Option A.
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A project should be accepted if the: A. NPV is positive B. NPV is negative c....
A project has positive NPV. The required return for the project is 15%. Which of the...
A project has positive NPV. The required return for the project is 15%. Which of the following statements is also descriptive (and meaningful) regarding the project? (More than one might be true) A. The project has positive IRR B. The project has positive PI. C. The project IRR > 15% D. The project has PI > 1 E. The project has a payback period that is less than the lifetime of the project. F. The project should be accepted.
1. If the NPV from a project is positive it must be that the internal rate...
1. If the NPV from a project is positive it must be that the internal rate of return is lower than the discount rate used. the project is not acceptable on a risk adjusted basis. this project is preferred to any other mutually exclusive project. accepting the project increases the value of the firm. 5 Question 9 (2 points) 1. Which of the following is not a rationale for using the NPV method in capital budgeting? An NPV of zero...
1. NPV According to the text, the NPV rule states that "An investment should be accepted...
1. NPV According to the text, the NPV rule states that "An investment should be accepted if the NPV is positive and rejected if it is negative." What does an NPV of zero mean? If you were a decision-maker faced with a project with a zero NPV (or very close to zero) what would you do? Why? 2. FORECASTING ERROR (RISK) What is a "forecasting error"? Why is it important to the analysis of capital expenditure projects?
please include parts a - d , thanks (NPV, PI, and IRR calculations) Fijisawa Inc. is...
please include parts a - d ,
thanks
(NPV, PI, and IRR calculations) Fijisawa Inc. is considering a major expansion of its product line and has estimated the following cash flows associated with such an expansion. The initial outlay would be $2,000,000, and the project would generate incremental free cash flows of $550,000 per year for 6 years. The appropriate required rate of return is 9 percent. a. Calculate the NPV b. Calculate the Pl c. Calculate the IRR. d....
(NPV, PI, and IRR calculations) Fijisawa Inc. is considering a major expansion of its product line...
(NPV, PI, and IRR calculations) Fijisawa Inc. is considering a major expansion of its product line and has estimated the following free cash flows associated with such an expansion. The initial outlay would be $1,800,000, and the project would generate incremental free cash flows of $600,000 per year for 5 years. The appropriate required rate of return is 8 percent. a. Calculate the NPV. b. Calculate the Pl. c. Calculate the IRR. d. Should this project be accepted? a. What...
What is the projects NPV? Should they accept the project? calculation) Calculate the NPV given the...
What is the projects NPV?
Should they accept the project?
calculation) Calculate the NPV given the following cash flows, EB. if the appropnate required rate of return is 14 percent. Should the project be accepted? What is the project's NPV 扣(Round to the nearest cent) i Data Table CASH FLOWS $50,000 35,000 35,000 35,000 -35,000 35,000 35,000
1. A. Which of the following mutually exclusive projects should be accepted? Project NPV Payback IRR...
1. A. Which of the following mutually exclusive projects should be accepted? Project NPV Payback IRR A +42,176 2 years, +$10,500 16.4% B +39,090 2 years, +9,670 15.8% C +41,894 3 years, +16,620 13.2% D +43,778 3 years, +11,625 14.9% E +38,952 2 years, +15,475 15.9% B. What is the Payback Period of a project with an initial cost of $75,000, Year 1 cash flow of $20,000 which increases by 5% each year? If the Payback cutoff is 3 years,...
Compute the NPV for Project M if the appropriate cost of capital is 8 percent. (Negative...
Compute the NPV for Project M if the appropriate cost of capital is 8 percent. (Negative amount should be indicated by a minus sign Do not round intermediate calculations and round your final answer to 2 decimal places.) Protect Time: Cash flow: $1,900 $530 $660 $700 $780 $280 NPV Should the project be accepted or rejected? accepted rejected
Compute the NPV for Project M if the appropriate cost of capital is 8 percent. (Negative...
Compute the NPV for Project M if the appropriate cost of capital is 8 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places.) Project M Time: 0 1 2 3 4 5 Cash flow: −$1,900 $530 $660 $700 $780 $280 NPV? Should the project be accepted or rejected? accepted rejected
Compute the NPV for Project K if the appropriate cost of capital is 5 percent. (Negative...
Compute the NPV for Project K if the appropriate cost of capital is 5 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places.) Project K Time: Cash flow: 0 1 $10,200 $5,100 2 $6,100 3 $6,100 4 $5,100 5 $10,200 NPV Should the project be accepted or rejected? accepted O rejected
1. If the NPV from a project is positive it must be that the internal rate of return is lower than the discount rate used. the project is not acceptable on a risk adjusted basis. this project is preferred to any other mutually exclusive project. accepting the project increases the value of the firm. 5 Question 9 (2 points) 1. Which of the following is not a rationale for using the NPV method in capital budgeting? An NPV of zero...
please include parts a - d ,
thanks
(NPV, PI, and IRR calculations) Fijisawa Inc. is considering a major expansion of its product line and has estimated the following cash flows associated with such an expansion. The initial outlay would be $2,000,000, and the project would generate incremental free cash flows of $550,000 per year for 6 years. The appropriate required rate of return is 9 percent. a. Calculate the NPV b. Calculate the Pl c. Calculate the IRR. d....
(NPV, PI, and IRR calculations) Fijisawa Inc. is considering a major expansion of its product line and has estimated the following free cash flows associated with such an expansion. The initial outlay would be $1,800,000, and the project would generate incremental free cash flows of $600,000 per year for 5 years. The appropriate required rate of return is 8 percent. a. Calculate the NPV. b. Calculate the Pl. c. Calculate the IRR. d. Should this project be accepted? a. What...
What is the projects NPV?
Should they accept the project?
calculation) Calculate the NPV given the following cash flows, EB. if the appropnate required rate of return is 14 percent. Should the project be accepted? What is the project's NPV 扣(Round to the nearest cent) i Data Table CASH FLOWS $50,000 35,000 35,000 35,000 -35,000 35,000 35,000
Compute the NPV for Project M if the appropriate cost of capital is 8 percent. (Negative amount should be indicated by a minus sign Do not round intermediate calculations and round your final answer to 2 decimal places.) Protect Time: Cash flow: $1,900 $530 $660 $700 $780 $280 NPV Should the project be accepted or rejected? accepted rejected
Compute the NPV for Project K if the appropriate cost of capital is 5 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places.) Project K Time: Cash flow: 0 1 $10,200 $5,100 2 $6,100 3 $6,100 4 $5,100 5 $10,200 NPV Should the project be accepted or rejected? accepted O rejected
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