Homework Answers
As the discount rate approaches zero, the present value of cash inflows gets closer to the sum of the cash inflows.
If the discount rates move away from zero, the present value of cash inflows starts decreasing. higher the discount rate, the lower the present value. Lower the discount rate the higher the present value.
Option '1' is correct
Gets closer to the sum of the cash inflows
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As the discount rate approaches zero, the present value of future, cash inflows Select one: @...
What is the present value of the cash inflows if a project uses a 12 discount...
What is the present value of the cash inflows if a project uses a 12 discount rate. The initial investment will be $12,950 and produce $3,000 in annual cash inflows. The estimated life of the project is ten years. Also, calculate the profitability index.
A project's is computed as the present value of project related cash inflows and outflows. Select...
A project's is computed as the present value of project related cash inflows and outflows. Select one: O A. internal rate of return B. net present value C. present value index O D. accounting rate of return
True or false and why? 5. The internal rate of return (IRR) is such a discount...
True or false and why? 5. The internal rate of return (IRR) is such a discount rate that ensures the sum of present value of the cash outflows (or costs) with the sum of future value of the cash inflows. 6. A basic rule in capital budgeting is that if a projects NPV is larger than or equal to its IRR, then the project should be accepted.
The internal rate of return (IRR) is such a discount rate that ensures the sum of...
The internal rate of return (IRR) is such a discount rate that ensures the sum of present value of the cash outflows (or costs) with the sum of future value of the cash inflows True or False
The internal rate of return (IRR) is such a discount rate that ensures the sum of...
The internal rate of return (IRR) is such a discount rate that ensures the sum of present value of the cash outflows (or costs) with the sum of future value of the cash inflows T/F
The net present value of a project's cash inflows is $8,216 at a 14 percent discount...
The net present value of a project's cash inflows is $8,216 at a 14 percent discount rate. The profitability index is 1.03 and the firm's tax rate is 34 percent. What is the initial cost of the project? $6,900.00 $7,018.50 $7,428.32 $7,976.70 $8,066.67
The present value of future cash flows: 3) increases as the discount rate decreases. O increases...
The present value of future cash flows: 3) increases as the discount rate decreases. O increases as the number of discounting periods increase. decreases as the number of discounting periods decrease. O decreases as the discount rate decreases.
Consider the following cash flow diagrams. In these diagrams the present value (P) and the future...
Consider the following cash flow diagrams. In these diagrams the
present value (P) and the future value (F) are economically
equivalent to the uniform series of payments (A) at a discount rate
of 8% per period. Is the value of P larger than F, equal to F, or
less than F?
QUESTION 1 Consider the following cash flow diagrams. In these diagrams the present value (P) and the future value (F) are economically equivalent to the uniform series of payments...
Choosing a higher discount rate decreases the calculated future value. Select one: True False
Choosing a higher discount rate decreases the calculated future value. Select one: True False
Which cash flow has the greatest present value if your discount rate is 9.5%? A) A...
Which cash flow has the greatest present value if your discount rate is 9.5%? A) A lump sum payment of $10,000 today B) A lump sum payment of $25,000 at the end of 10 years C) A perpetual stream of annual payments starting at $500 in one year and increasing at 5% per year thereafter D) A perpetual stream of annual parents of $1,000 starting in one year
What is the present value of the cash inflows if a project uses a 12 discount rate. The initial investment will be $12,950 and produce $3,000 in annual cash inflows. The estimated life of the project is ten years. Also, calculate the profitability index.
A project's is computed as the present value of project related cash inflows and outflows. Select one: O A. internal rate of return B. net present value C. present value index O D. accounting rate of return
The present value of future cash flows: 3) increases as the discount rate decreases. O increases as the number of discounting periods increase. decreases as the number of discounting periods decrease. O decreases as the discount rate decreases.
Consider the following cash flow diagrams. In these diagrams the
present value (P) and the future value (F) are economically
equivalent to the uniform series of payments (A) at a discount rate
of 8% per period. Is the value of P larger than F, equal to F, or
less than F?
QUESTION 1 Consider the following cash flow diagrams. In these diagrams the present value (P) and the future value (F) are economically equivalent to the uniform series of payments...
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