Homework Answers
A and c only
As it is always better to have higher profit margin and return on assets.
Its always better to have lower debts ..so lower the debt to equity ratio the better for the company
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You are considering the following two mutually exclusive projects. The required rate of return is 10.75...
Given the following cash flows for two mutually exclusive projects, and a required rate of return...
Given the following cash flows for two mutually exclusive projects, and a required rate of return of 12%, which of the following statements is true? Year 0 1 Project A -580,000 290,000 290,000 150,000 150,000 2 3 Project B -580,000 130,000 130,000 230.000 230,000 230.000 115,000 4 5 6 O Both projects should be accepted because both have a positive NPV (and EAA). O Project B should be accepted because it has the highest EAA. O Project B should be...
You are considering the following two projects which are mutually exclusive. The required return on each...
You are considering the following two projects which are mutually exclusive. The required return on each project is 14%. Which project should you accept and what is the best reason for that decision? Group of answer choices Both Project A and B since they both have positive NPV Project A, because it has the higher profitability index Project A, because it has the higher net present value Project B, because it has the higher net present value O-NM Project A...
3. You are considering two mutually exclusive projects with the following cash flows. Which project(s) should...
3. You are considering two mutually exclusive projects with the following cash flows. Which project(s) should you accept if the discount rate is 8.5 percent? What if the discount rate is 13 percent? Year Project A Project B -$80,000 -$80,000 31,000 31,000 0 31,000 110,000 A. accept project A as it always has the higher NPV B. accept project B as it always has the higher NPV C. accept A at 8.5 percent and B at 13 percent D. accept...
(Risk-adjusted NPV)The Hokie Corporation is considering two mutually exclusive projects. Both require an initial outlay of...
(Risk-adjusted NPV)The Hokie Corporation is considering two mutually exclusive projects. Both require an initial outlay of $10,000 and will operate for 7 years. Project A will produce expected cash flows of $5,000 per year for years 1 through 7, whereas project B will produce expected cash flows of $6,000 per year for years 1 through 7. Because project B is the riskier of the two projects, the management of Hokie Corporation has decided to apply a required rate of return...
Bausch Company is presented with the following two mutually exclusive projects. The required return for both...
Bausch Company is presented with the following two mutually exclusive projects. The required return for both projects is 15 percent. Project N Project M -S140,000 61,500 73,400 68,100 40,500 -$359,000 159,300 168,400 154,800 110,400 a. What is the IRR for each project? b. What is the NPV for each project? C. Which, if either, of the projects should the company accept?
(Risk-adjusted NPV) The Hokie Corporation is considering two mutually exclusive projects. Both require an initial outlay...
(Risk-adjusted NPV) The Hokie Corporation is considering two mutually exclusive projects. Both require an initial outlay of $12,000 and wil operate for 8 years Project A will produce expected cash flows of $8,000 per year for years 1 through 8, whereas project will produce expected cash flows of 9,000 per year for years through 8. Because project B is the riskler of the two projects, the management of Hokie Corporation has decided to apply a required rate of return of...
Tyde Company is presented with the following two mutually exclusive projects. The required return for both...
Tyde Company is presented with the following two mutually exclusive projects. The required return for both projects is 14 percent. Year. PROJECT A. PROJECT B 0. -$140,000. -$365000 1. 64,500. 147,500 2. 82,500. 190,000 3. 73,500. 132,500 4. 59,500. 120,000 a. What is the IRR for each project? ( Do not round intermediate calculations and enter answer as a percent rounded to 2 decimal places) b. What is the NPV for each project? c. Which, if either, of the projects...
Question 24 1 pts You are considering the following two mutually exclusive projects. Which project(s) should...
Question 24 1 pts You are considering the following two mutually exclusive projects. Which project(s) should be recommended? Project A Project B Year Cash Flow Year Cash Flow 0 $75,000 0 -$70,000 1 $19,000 1 $10,000 2 $48,000 2 $16,000 3 $12,000 3 $72,000 Required rate of return: 10 percent (for A) 13 percent (for B) O accept project B and reject project A. accept both project A and project B. O reject both project A and project B. O...
NPV and IRR. Reece Company is presented with the following two mutually exclusive projects. The required return f...
NPV and IRR. Reece Company is presented with the following two mutually exclusive projects. The required return for both projects is 15 percent. Year Project M Project N -$150,000 -$372,000 68,600 159,300 193,200 154,800 2 76,800 71,300 110,400 &se40,500 What is the IRR for each project? a. What is the NPV for each project? b. Which, if either, of the projects should the company accept? C. O-23
Bausch Company is presented with the following two mutually exclusive projects. The required return for both...
Bausch Company is presented with the following two mutually exclusive projects. The required return for both projects is 17 percent. Year O-NM Project M $138,000 64,700 82,700 73,700 59.700 Project N -$367,000 146,500 192,000 131,500 122.000 a. What is the IRR for each project? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g. 32.16.) b. What is the NPV for each project? (Do not round intermediate calculations and round your answers...
Given the following cash flows for two mutually exclusive projects, and a required rate of return of 12%, which of the following statements is true? Year 0 1 Project A -580,000 290,000 290,000 150,000 150,000 2 3 Project B -580,000 130,000 130,000 230.000 230,000 230.000 115,000 4 5 6 O Both projects should be accepted because both have a positive NPV (and EAA). O Project B should be accepted because it has the highest EAA. O Project B should be...
3. You are considering two mutually exclusive projects with the following cash flows. Which project(s) should you accept if the discount rate is 8.5 percent? What if the discount rate is 13 percent? Year Project A Project B -$80,000 -$80,000 31,000 31,000 0 31,000 110,000 A. accept project A as it always has the higher NPV B. accept project B as it always has the higher NPV C. accept A at 8.5 percent and B at 13 percent D. accept...
(Risk-adjusted NPV)The Hokie Corporation is considering two mutually exclusive projects. Both require an initial outlay of $10,000 and will operate for 7 years. Project A will produce expected cash flows of $5,000 per year for years 1 through 7, whereas project B will produce expected cash flows of $6,000 per year for years 1 through 7. Because project B is the riskier of the two projects, the management of Hokie Corporation has decided to apply a required rate of return...
Bausch Company is presented with the following two mutually exclusive projects. The required return for both projects is 15 percent. Project N Project M -S140,000 61,500 73,400 68,100 40,500 -$359,000 159,300 168,400 154,800 110,400 a. What is the IRR for each project? b. What is the NPV for each project? C. Which, if either, of the projects should the company accept?
(Risk-adjusted NPV) The Hokie Corporation is considering two mutually exclusive projects. Both require an initial outlay of $12,000 and wil operate for 8 years Project A will produce expected cash flows of $8,000 per year for years 1 through 8, whereas project will produce expected cash flows of 9,000 per year for years through 8. Because project B is the riskler of the two projects, the management of Hokie Corporation has decided to apply a required rate of return of...
Question 24 1 pts You are considering the following two mutually exclusive projects. Which project(s) should be recommended? Project A Project B Year Cash Flow Year Cash Flow 0 $75,000 0 -$70,000 1 $19,000 1 $10,000 2 $48,000 2 $16,000 3 $12,000 3 $72,000 Required rate of return: 10 percent (for A) 13 percent (for B) O accept project B and reject project A. accept both project A and project B. O reject both project A and project B. O...
NPV and IRR. Reece Company is presented with the following two mutually exclusive projects. The required return for both projects is 15 percent. Year Project M Project N -$150,000 -$372,000 68,600 159,300 193,200 154,800 2 76,800 71,300 110,400 &se40,500 What is the IRR for each project? a. What is the NPV for each project? b. Which, if either, of the projects should the company accept? C. O-23
Bausch Company is presented with the following two mutually exclusive projects. The required return for both projects is 17 percent. Year O-NM Project M $138,000 64,700 82,700 73,700 59.700 Project N -$367,000 146,500 192,000 131,500 122.000 a. What is the IRR for each project? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g. 32.16.) b. What is the NPV for each project? (Do not round intermediate calculations and round your answers...
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