Homework Answers
Non return payback period doesn't consider time value of money and it also ignores the cashflow after the payback period
However PW or AW analysis considers time value of money and entire cashflow throughout the life of project
Hence the two method may produce different results.
Hence answer is TRUE
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UI. BU SULULULL... Elke 20141192.DO 6: The use of no-return payback period to make alternative selection...
The Payback Period could be computed using the Simple Payback or the Discounted Payback methods, in...
The Payback Period could be computed using the Simple Payback or the Discounted Payback methods, in your opinion which do you think is better to use, and why? Give an example of how different the payback period method utilize will affect the selection of an alternative.
When will the conventional payback method and discounted payback method yield the same result? A. Always...
When will the conventional payback method and discounted payback method yield the same result? A. Always B. Never C. If and only if the interest (discount) rate for the discounted payback method is much lower than the conventional method. D. No conclusions can be drawn based on the statement. E. When the interest rate is zero. Two mutually exclusive project alternatives are being considered, where both project lives are shorter than the infinite project analysis period. The first alternative has...
6) Consider the following options and using the payback period method determine which alternative should be...
6) Consider the following options and using the payback period method determine which alternative should be selected YEAR B 2 A -$215,000 $15,000 $25,000 $55,000 $105,000 $30,000 $185,000 $67,000 $63,000 $55,000 $76,000 $12,000
6. The payback period The payback method helps firms establish and identify a maximum acceptable payback...
6. The payback period The payback method helps firms establish and identify a maximum acceptable payback period that helps in their capital budgeting decisions. Consider the case of Green Caterpillar Garden Supplies Inc.: Green Caterpillar Garden Supplies Inc. 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 answer this question, Green Caterpillar's CFO has asked that you...
Question 2 (1 point) A tabulation of incremental cash flow between two different-life alternatives must be...
Question 2 (1 point) A tabulation of incremental cash flow between two different-life alternatives must be prepared over the LCM of their lives. True False Question 3 (1 point) In evaluating mutually exclusive alternatives on the basis of rate of return, it is necessary to conduct an "Incremental ROR"in order to obtain the same ranking as the PW and AW methods True False Question 7 (1 point) When an incremental rate of return analysis is conducted correctly, the alternative identified...
For the cash flows below, if 6% is the minimum attractive rate of return, which alternative...
For the cash flows below, if 6% is the minimum attractive rate of return, which alternative should be selected? Use rate of return analysis. alternative 1 alternative 2 Year 0 -$5000 -$5000 -3000 2000 4000 2000 2000 4000 4000 2000
6. The payback period The payback method helps firms establish and identify a maximum acceptable payback...
6. The payback period The payback method helps firms establish and identify a maximum acceptable payback period that helps in their capital budgeting decisions. Consider the case of Cold Goose Metal Works Inc.: Cold Goose Metal Works Inc. 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 Beta's expected future cash flows. To answer this question, Cold Goose's CFO has asked that you...
6. The payback period The payback method helps firms establish and identify a maximum acceptable payback...
6. The payback period The payback method helps firms establish and identify a maximum acceptable payback period that helps in their capital budgeting decisions. Consider the case of Green Caterpillar Garden Supplies Inc.: Green Caterpillar Garden Supplies Inc. 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 answer this question, Green Caterpillar’s CFO has asked that you...
6. The payback period The payback method helps firms establish and identify a maximum acceptable payback...
6. The payback period The payback method helps firms establish and identify a maximum acceptable payback period that helps in their capital budgeting decisions Consider the case of Cold Goose Metal Works Inc.: Cold Goose Metal Works Inc. 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 Beta's expected future cash flows. To answer this question, Cold Goose's CFO has asked that you...
6. The payback period The payback method helps firms establish and identify a maximum acceptable payback...
6. The payback period The payback method helps firms establish and identify a maximum acceptable payback period that helps in their capital budgeting decisions. Consider the case of Blue Hamster Manufacturing Inc.: Blue Hamster Manufacturing Inc. 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 Sigma's expected future cash flows. To answer this question, Blue Hamster's CFO has asked that you compute the...
6) Consider the following options and using the payback period method determine which alternative should be selected YEAR B 2 A -$215,000 $15,000 $25,000 $55,000 $105,000 $30,000 $185,000 $67,000 $63,000 $55,000 $76,000 $12,000
6. The payback period The payback method helps firms establish and identify a maximum acceptable payback period that helps in their capital budgeting decisions. Consider the case of Green Caterpillar Garden Supplies Inc.: Green Caterpillar Garden Supplies Inc. 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 answer this question, Green Caterpillar's CFO has asked that you...
Question 2 (1 point) A tabulation of incremental cash flow between two different-life alternatives must be prepared over the LCM of their lives. True False Question 3 (1 point) In evaluating mutually exclusive alternatives on the basis of rate of return, it is necessary to conduct an "Incremental ROR"in order to obtain the same ranking as the PW and AW methods True False Question 7 (1 point) When an incremental rate of return analysis is conducted correctly, the alternative identified...
For the cash flows below, if 6% is the minimum attractive rate of return, which alternative should be selected? Use rate of return analysis. alternative 1 alternative 2 Year 0 -$5000 -$5000 -3000 2000 4000 2000 2000 4000 4000 2000
6. The payback period The payback method helps firms establish and identify a maximum acceptable payback period that helps in their capital budgeting decisions. Consider the case of Cold Goose Metal Works Inc.: Cold Goose Metal Works Inc. 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 Beta's expected future cash flows. To answer this question, Cold Goose's CFO has asked that you...
6. The payback period The payback method helps firms establish and identify a maximum acceptable payback period that helps in their capital budgeting decisions Consider the case of Cold Goose Metal Works Inc.: Cold Goose Metal Works Inc. 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 Beta's expected future cash flows. To answer this question, Cold Goose's CFO has asked that you...
6. The payback period The payback method helps firms establish and identify a maximum acceptable payback period that helps in their capital budgeting decisions. Consider the case of Blue Hamster Manufacturing Inc.: Blue Hamster Manufacturing Inc. 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 Sigma's expected future cash flows. To answer this question, Blue Hamster's CFO has asked that you compute the...
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