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2 pts Question 5 Your required return is 10%. Should you accept a project with the...
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...
Consider Project Theta, its time line of cash flows, and one of the project IRRs: Year....................0.............1............2............IRR...
Consider Project Theta, its time line of cash flows, and one of the project IRRs: Year....................0.............1............2............IRR Cash Flow......($200).....$850....($700)......15% What is the best decision for Project Theta (accept or reject) if the project’s required rate of return is 15% and why? a. Accept the project because the payback is short b. Accept the project because the NPV is greater than zero c. Reject the project because the IRR is less than the required rate of return d. Reject the project because...
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...
Consider Project Theta, its time line of cash flows, and one of the project IRRs: Year...................0..............1...............2...........IRR...
Consider Project Theta, its time line of cash flows, and one of the project IRRs: Year...................0..............1...............2...........IRR Cash Flow.....($200).....$850.......($700).......15% What is the best decision for Project Theta (accept or reject) if the project’s required rate of return is 15% and why? a. Reject the project because the NPV is less than zero b. Accept the project because the IRR is greater than zero c. Accept the project because the NPV is greater than zero d. Accept the project because the payback...
D Question 21 1 pts You have a required return of 12%. A project that you...
D Question 21 1 pts You have a required return of 12%. A project that you are considering offers an IRR of 10.97%. Should you accept or reject this project? Accept Reject Question 22 1 pts You have a project that with an npv of 56,478. Should you accept or reject the project? Accept Reject
Assume a project has normal cash flows. Given this, you should accept the project Multiple Choice...
Assume a project has normal cash flows. Given this, you should accept the project Multiple Choice a) if the total cash inflows exceed the initial cash outflow. b) if, and only if, the NPV is exactly equal to zero. c) if the NPV is positive and reject it if the NPV is negative. d) only if the NPV is equal to the initial cash flow. e) because it has positive cash flows for every time period after the initial investment
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...
Dropdown options: (accept project Sigma, reject project Sigma) The internal rate of return (IRR) refers to the compound...
Dropdown options: (accept project Sigma, reject project
Sigma)
The internal rate of return (IRR) refers to the compound annual rate of return that a project generates based on its up-front cost and subsequent cash flows. Consider the case of Blue Llama Mining Company: Blue Llama Mining Company is evaluating a proposed capital budgeting project (project Sigma) that will require an initial investment of $900,000. Blue Llama Mining Company has been basing capital budgeting decisions on a project's NPV; however, its...
A firm evaluates all of its projects by applying the NPV decision rule. A project under...
A firm evaluates all of its projects by applying the NPV decision rule. A project under consideration has the following cash flows: Year 0 Cash Flow -$28,300 12,300 15,300 11,300 2 3 What is the NPV for the project if the required return is 11 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV 3461.37 At a required return of 11 percent, should the firm accept this project? Yes No What is...
A firm evaluates all of its projects by applying the NPV decision rule. A project under...
A firm evaluates all of its projects by applying the NPV decision rule. A project under consideration has the following cash flows: Year Cash Flow 0 -$28,300 12,300 15,300 11,300 What is the NPV for the project if the required return is 11 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e... 32.16.) NPV At a required return of 11 percent, should the firm accept this project? ONO Yes What is the NPV for...
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...
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...
D Question 21 1 pts You have a required return of 12%. A project that you are considering offers an IRR of 10.97%. Should you accept or reject this project? Accept Reject Question 22 1 pts You have a project that with an npv of 56,478. Should you accept or reject the project? Accept Reject
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...
Dropdown options: (accept project Sigma, reject project
Sigma)
The internal rate of return (IRR) refers to the compound annual rate of return that a project generates based on its up-front cost and subsequent cash flows. Consider the case of Blue Llama Mining Company: Blue Llama Mining Company is evaluating a proposed capital budgeting project (project Sigma) that will require an initial investment of $900,000. Blue Llama Mining Company has been basing capital budgeting decisions on a project's NPV; however, its...
A firm evaluates all of its projects by applying the NPV decision rule. A project under consideration has the following cash flows: Year 0 Cash Flow -$28,300 12,300 15,300 11,300 2 3 What is the NPV for the project if the required return is 11 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV 3461.37 At a required return of 11 percent, should the firm accept this project? Yes No What is...
A firm evaluates all of its projects by applying the NPV decision rule. A project under consideration has the following cash flows: Year Cash Flow 0 -$28,300 12,300 15,300 11,300 What is the NPV for the project if the required return is 11 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e... 32.16.) NPV At a required return of 11 percent, should the firm accept this project? ONO Yes What is the NPV for...
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