The length of time required to recover the initial investment in a capital asset is known...
The length of time required to recover the initial investment in a capital asset is known as the:
a. the rate of return
b. payback method
c. internal rate of return
d. unadjusted rate of return
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The length of time required to recover the initial investment in
a capital asset is known...
The length of time required for an investment to generate cash flows sufficient to recoup the...
The length of time required for an investment to generate cash flows sufficient to recoup the initial cost of the investment is called the a. Net present value b. Profitability index c. Payback period d. Internal rate of return e. Discounted cash period
If you have the following information about an investment opportunity: Initial investment (cash out- required capital)...
If you have the following information about an investment opportunity: Initial investment (cash out- required capital) is $ 500,000 Expected operating cash inflows( after considering taxes) in year (1) $ 200,000, in year (2) $ 260,000, in year (3) $ 250,000, & in year (4) $ 150,000 Calculate the payback period, the net present value if the cost of capital is % 15%, & also calculate the internal rate of return?
If you have the following information about an investment opportunity: Initial investment (cash out- required capital)...
If you have the following information about an investment opportunity: Initial investment (cash out- required capital) is $ 500,000 Expected operating cash inflows( after considering taxes) in year (1) $ 200,000, in year (2) $ 260,000, in year (3) $ 250,000, & in year (4) $ 150,000 Calculate the payback period, the net present value if the cost of capital is % 15%, & also calculate the internal rate of return? Excel will do
For a typical capital investment project, the bulk of the investment-related cash outflow occurs: During the...
For a typical capital investment project, the bulk of the investment-related cash outflow occurs: During the initiation stage of the project During the operation stage of the project Either during the initiation stage or the operation stage During neither the initiation stage nor the operation stage Evenly during all three stages: initiation, operation, and final disposal The time value of money is explicitly considered in which of the following capital budgeting methods? Payback method Net present value (NPV) method Operating...
1. We can get multiple IRRS when we draw an NPV profile for a project when:...
1. We can get multiple IRRS when we draw an NPV profile for a project when: a. The project is riskless. b. The project requires a large investment. c. The project cash flows are uneven and change in sign. d. The project has a balloon payment. e. The opportunity cost of capital is high. 2. The length of time required for an investment to generate cash flows sufficient to recover its initial cost, without taking into account time value of...
If an asset is sold for less than its depreciation book value, it is taxed at...
If an asset is sold for less than its depreciation book value, it is taxed at the capital gain tax rate taxed at ordinary income tax rate. subject to tax savings due to capital loss not subject to any income tax consideration. Changes in the firm's cash flows that are a direct consequence of accepting a project are erosion cash flows e. Net present value cash flows incremental cash flows d. After tax cash flows 3. Under the IRR method,...
Question 13 (1 point) Which one of the following can be completely ignored when analyzing a...
Question 13 (1 point) Which one of the following can be completely ignored when analyzing a project? OA) discount rate. OB) cost of capital. OC) opportunity costs. D) sunk costs. E) side effects. Question 14 (1 point) The length of time required for an investment to generate cash flows sufficient to recover its initial cost is the: CIDA) Internal rate of return. B) Time value of money. Payback period. D Nel present value. E l bility index
d Ranking Investment Proposals: Payback Period, Accounting Rate of Return, and Net Present Value Presented is...
Ranking Investment Proposals: Payback Period, Accounting Rate of Return, and Net Present Value Presented is information pertaining to the cash flows of three mutually exclusive investment proposals: Proposal X Proposal Y Proposal Z Initial investment $69,000 $69,000 $69,000 Cash flow from operations Year 1 60,000 34,500 69,000 Year 2 9,000 34,500 Year 3 33,500 33,500 Disinvestment 0. Life (years) 3 years 3 years 1 year(a) Select the best investment proposal using the payback period, the accounting rate of return on initial investment, and...
Ranking Investment Proposals:Payback Period, Accounting Rate of Return, and Net Present Value Presented is information...
Ranking Investment Proposals:Payback Period, Accounting Rate of Return, and Net Present Value Presented is information pertaining to the cash flows of three mutually exclusive investment proposals: Proposal X Proposal Y Proposal Z Initial investment $81,000 $81,000 $81,000 Cash flow from operations Year 1 80,000 40,500 81,000 Year 2 1,000 40,500 Year 3 41,000 41,000 Disinvestment Life (years) 3 years 3 years 1 year 0 (a) Select the best investment proposal using the payback period, the accounting rate of return on...
Match each definition that follows with the term (a–f) it defines. A measure of the average...
Match each definition that follows with the term (a–f) it defines. A measure of the average income as a percent of the average investment The process by which management allocates funds among various capital investment proposals A stream of equal cash flow amounts A formal means of analyzing long-range investment decisions Uses present value concepts to compute the rate of return on an investment from a capital investment proposal based on its' expected net cash flows The length of time...
1. We can get multiple IRRS when we draw an NPV profile for a project when: a. The project is riskless. b. The project requires a large investment. c. The project cash flows are uneven and change in sign. d. The project has a balloon payment. e. The opportunity cost of capital is high. 2. The length of time required for an investment to generate cash flows sufficient to recover its initial cost, without taking into account time value of...
If an asset is sold for less than its depreciation book value, it is taxed at the capital gain tax rate taxed at ordinary income tax rate. subject to tax savings due to capital loss not subject to any income tax consideration. Changes in the firm's cash flows that are a direct consequence of accepting a project are erosion cash flows e. Net present value cash flows incremental cash flows d. After tax cash flows 3. Under the IRR method,...
Question 13 (1 point) Which one of the following can be completely ignored when analyzing a project? OA) discount rate. OB) cost of capital. OC) opportunity costs. D) sunk costs. E) side effects. Question 14 (1 point) The length of time required for an investment to generate cash flows sufficient to recover its initial cost is the: CIDA) Internal rate of return. B) Time value of money. Payback period. D Nel present value. E l bility index
Ranking Investment Proposals: Payback Period, Accounting Rate of Return, and Net Present Value Presented is information pertaining to the cash flows of three mutually exclusive investment proposals: Proposal X Proposal Y Proposal Z Initial investment $69,000 $69,000 $69,000 Cash flow from operations Year 1 60,000 34,500 69,000 Year 2 9,000 34,500 Year 3 33,500 33,500 Disinvestment 0. Life (years) 3 years 3 years 1 year(a) Select the best investment proposal using the payback period, the accounting rate of return on initial investment, and...
Ranking Investment Proposals:Payback Period, Accounting Rate of Return, and Net Present Value Presented is information pertaining to the cash flows of three mutually exclusive investment proposals: Proposal X Proposal Y Proposal Z Initial investment $81,000 $81,000 $81,000 Cash flow from operations Year 1 80,000 40,500 81,000 Year 2 1,000 40,500 Year 3 41,000 41,000 Disinvestment Life (years) 3 years 3 years 1 year 0 (a) Select the best investment proposal using the payback period, the accounting rate of return on...
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