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Question 8 1 pts When we find the IRR, this is the rate which makes: O...
Question 8 3 pts Which of the computational methods do we use to find the incremental...
Question 8 3 pts Which of the computational methods do we use to find the incremental IRR of the given projects and which of the two projects is preferred by IRR with the given MARR? O($7.000) ($10,000) 1$1.700 $3.500 2 $1.500 $4,100 3$4,200 $2,100 4 $2.900 $500 5 $300 $2,900 MARR-1196 O B-AA B-A, B o A-B, B DIA-B.A
D l Question 1 When calculating incremental cash flows, we should include O interest O financing...
D l Question 1 When calculating incremental cash flows, we should include O interest O financing expenses Q sunk costs opportunity costs | Question 2 2 pts The cash flows that occur just because of a new project are called O marginal cash flows o project cash flos e additional cash flows O incremental cash flows 2 pts D | Question 3 Sun Corp. uses a discount rate of 6% for below-average risk projects, 8% for average-risk projects, and 10%...
Question 1 5 pts What is WACC? Why is it important? O The firm's required return....
Question 1 5 pts What is WACC? Why is it important? O The firm's required return. It is used as the discount rate in NPV and it is used to compare to IRR. O It is the required return on debt. O It is the firm's required return. If IRR is less than WACC, you should accept the project. O It is the required return on equity. Question 2 5 pts What are some of the issues with the payback...
Question 2 1 pts The internal rate of return may be defined as Jh The discount...
Question 2 1 pts The internal rate of return may be defined as Jh The discount rate that makes the project NPV equal to zero. The discount rate that makes the PV of the expected cash flows equal to the initial outlay. the market rate of interest less the risk free rate. a&b are both correct. a&care both correct Question 3 1 pts For independent projects, the NPV method and the IRR method will always lead to the same accept/reject...
Question 7 2 pts The IRR of System 1 is 83.93 percent and the IRR of...
Question 7 2 pts The IRR of System 1 is 83.93 percent and the IRR of System 2 is 50.07 percent. The NPV of System 1 is $22,969.42 and the NPV of System 2 is $36,001.43. System 1 delivers a higher IRR because it requires a lower initial investment and the cost is recovered the first year. Thus, even with lower cash inflows in the years after startup, System 1 is able to deliver a higher return on the initial...
8) Which of the following best describe Net Present Value (NPV), Internal Rate of Return (IRR)...
8) Which of the following best describe Net Present Value (NPV), Internal Rate of Return (IRR) and Payback (PB): O d) None of these really describe how each of these 3 decision tools is used O b) NPV=bang for the buck; IRR= how long is my money at risk; PB-size of the prize O a) NPV=how long is my money at risk; IRR=size of the prize; PB=bang for the buck O c) NPV=size of the prize; IRR=bang for the buck;...
Question 13 1 pts The nominal interest rate is 26%. The real rate is 8%. What...
Question 13 1 pts The nominal interest rate is 26%. The real rate is 8%. What is the inflation rate? O 34.00% O 16.67% O 18.00% 0 36.08% None of the above. 1 pts Question 14 Project ELI's only cash outflow is its cost of $16,000. The project has a net present value NPV of tonno Its profitability index (PVcash inflows PV cash outflows is
First Blank: always, sometimes, never Second Blank: IRR, MIRR, required rate of return Third Blank: IRR,...
First Blank: always, sometimes, never
Second Blank: IRR, MIRR, required rate of return
Third Blank: IRR, MIRR, required rate of return
Fourth Blank: IRR method, NPV method
6. Understanding the NPV profile If projects are mutually exclusive, only one project can be chosen. The internal rate of return (IRR) and the net present value (NPV) methods will not always choose the same project. If the crossover rate on the NPV profile is below the horizontal axis, the methods will agree....
Question 3 5 pts Our firm's cost of capital is 10%. We are thinking about taking...
Question 3 5 pts Our firm's cost of capital is 10%. We are thinking about taking a project that gives a 10% rate of return. Which of the following statements are correct. The NPV of this project is zero. The firm will increase its value if it takes this project. The firm should not take this project because it will lose value if the project is taken. The IRR of the project is greater than the cost of capital. Two...
Dropdown options first 2 blanks: (internal rate of return IRR, required rate of return, modified internal...
Dropdown options first 2 blanks: (internal rate of return IRR,
required rate of return, modified internal rate of return MIRR)
Dropdown options 3rd blank: (NPV method, IRR method)
If projects are mutually exclusive, only one project can be chosen. The internal rate of return (IRR) and the net present value (NPV) methods will not always choose the same project. If the crossover rate on the NPV profile is below the horizontal axis, the methods will agree. always Projects Y and...
Question 8 3 pts Which of the computational methods do we use to find the incremental IRR of the given projects and which of the two projects is preferred by IRR with the given MARR? O($7.000) ($10,000) 1$1.700 $3.500 2 $1.500 $4,100 3$4,200 $2,100 4 $2.900 $500 5 $300 $2,900 MARR-1196 O B-AA B-A, B o A-B, B DIA-B.A
D l Question 1 When calculating incremental cash flows, we should include O interest O financing expenses Q sunk costs opportunity costs | Question 2 2 pts The cash flows that occur just because of a new project are called O marginal cash flows o project cash flos e additional cash flows O incremental cash flows 2 pts D | Question 3 Sun Corp. uses a discount rate of 6% for below-average risk projects, 8% for average-risk projects, and 10%...
Question 1 5 pts What is WACC? Why is it important? O The firm's required return. It is used as the discount rate in NPV and it is used to compare to IRR. O It is the required return on debt. O It is the firm's required return. If IRR is less than WACC, you should accept the project. O It is the required return on equity. Question 2 5 pts What are some of the issues with the payback...
Question 2 1 pts The internal rate of return may be defined as Jh The discount rate that makes the project NPV equal to zero. The discount rate that makes the PV of the expected cash flows equal to the initial outlay. the market rate of interest less the risk free rate. a&b are both correct. a&care both correct Question 3 1 pts For independent projects, the NPV method and the IRR method will always lead to the same accept/reject...
Question 7 2 pts The IRR of System 1 is 83.93 percent and the IRR of System 2 is 50.07 percent. The NPV of System 1 is $22,969.42 and the NPV of System 2 is $36,001.43. System 1 delivers a higher IRR because it requires a lower initial investment and the cost is recovered the first year. Thus, even with lower cash inflows in the years after startup, System 1 is able to deliver a higher return on the initial...
8) Which of the following best describe Net Present Value (NPV), Internal Rate of Return (IRR) and Payback (PB): O d) None of these really describe how each of these 3 decision tools is used O b) NPV=bang for the buck; IRR= how long is my money at risk; PB-size of the prize O a) NPV=how long is my money at risk; IRR=size of the prize; PB=bang for the buck O c) NPV=size of the prize; IRR=bang for the buck;...
Question 13 1 pts The nominal interest rate is 26%. The real rate is 8%. What is the inflation rate? O 34.00% O 16.67% O 18.00% 0 36.08% None of the above. 1 pts Question 14 Project ELI's only cash outflow is its cost of $16,000. The project has a net present value NPV of tonno Its profitability index (PVcash inflows PV cash outflows is
First Blank: always, sometimes, never
Second Blank: IRR, MIRR, required rate of return
Third Blank: IRR, MIRR, required rate of return
Fourth Blank: IRR method, NPV method
6. Understanding the NPV profile If projects are mutually exclusive, only one project can be chosen. The internal rate of return (IRR) and the net present value (NPV) methods will not always choose the same project. If the crossover rate on the NPV profile is below the horizontal axis, the methods will agree....
Question 3 5 pts Our firm's cost of capital is 10%. We are thinking about taking a project that gives a 10% rate of return. Which of the following statements are correct. The NPV of this project is zero. The firm will increase its value if it takes this project. The firm should not take this project because it will lose value if the project is taken. The IRR of the project is greater than the cost of capital. Two...
Dropdown options first 2 blanks: (internal rate of return IRR,
required rate of return, modified internal rate of return MIRR)
Dropdown options 3rd blank: (NPV method, IRR method)
If projects are mutually exclusive, only one project can be chosen. The internal rate of return (IRR) and the net present value (NPV) methods will not always choose the same project. If the crossover rate on the NPV profile is below the horizontal axis, the methods will agree. always Projects Y and...
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