A discounting procedure providing a common base of comparison for alternative cash flows is the: Discount rate Accountin...
A discounting procedure providing a common base of comparison for alternative cash flows is the:
Discount rate
Accounting rate of return
Net present value
Compound interest
Homework Answers
Net present value is the present value of all future cash inflows receivable from an investment less the present value of all future cash outflows
Net present value is used to compare different streams of cash flows receivable from different investment alternatives in order to determine which alternative is best for business
So, as per above discussion, option C ( Net Present Value ) is the correct option
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A discounting procedure providing a common base of comparison for alternative cash flows is the: Discount rate Accountin...
Discounting cash flows involves: A. taking the cash discount offered on a trade merchandise B. estimating...
Discounting cash flows involves: A. taking the cash discount offered on a trade merchandise B. estimating only the cash flows that occur in the first 4 years of a project. C. present value of the investment's future cash flows minus the investments's cost. D. next decrease in value caused by waiting to receive the cash benefit fro the investment. E. value received at th end of the investment period minus the investment's cost.
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.
The value of a future set of cash flows in today's dollars is calculated using: compound...
The value of a future set of cash flows in today's dollars is calculated using: compound interest net present value accounting rate of return internal rate of return
Which of the following is the discount rate that makes the present value of the estimated cash flows equal to the initia...
Which of the following is the discount rate that makes the present value of the estimated cash flows equal to the initial cost of the investment? Modified internal rate of return Internal rate of return Discounted payback period Payback period Net present value
The assumption that the cash flows from an investment project are reinvested at the company's discount...
The assumption that the cash flows from an investment project are reinvested at the company's discount rate applies to: Multiple Choice o both the internal rate of return and the net present value methods. o only the internal rate of return method. • only the net present value method. only the net present velue method o neither the internal rate of return nor net present value methods.
What is the net present value of a project with the following cash flows if the discount rate is 14 percent?
18) NET PRESENT VALUE (BASIC)What is the net present value of a project with the following cash flows if the discount rate is 14 percent?
True or false Capital budget decisions are usually short term in nature. The procedure used to...
True or false Capital budget decisions are usually short term in nature. The procedure used to compute the present value of a series a cash flows is called discounting. The internal rate of return is the discount rate that causes the net present of a project to equal zero. When using the net present value method, changing the rate will change the net present value. One of the keys of activity based costing is selecting the appropriate cost driver. Activity...
Restate the above net cash flow in real terms. Discount the restated cash flows at a...
Restate the above net cash flow in real terms. Discount the
restated cash flows at a real discount rate. Assume a 20% nominal
rate and 10% expected inflation. NPV should be unchanged at +2,593,
or $2,593,000.
($ thousands) Period 1 - 14,100 -1,634 3.097 - 14,100 -1,362 2.151 2,593 (sum of PVS) Net cash flow Present value at 20% Net present value 3 6,473 3.746 4 10.684 5,152 5 10,135 4,073 6 5.907 1,978 7 3.419 954 Restate the above...
Assume the appropriate discount rate for the following cash flows is 8.8 percent. Year Cash Flow...
Assume the appropriate discount rate for the following cash flows is 8.8 percent. Year Cash Flow $1,400 1.300 1,000 800 What is the present value of the cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value
The appropriate discount rate for the following cash flows is 8 percent compounded quarterly. Year Cash...
The appropriate discount rate for the following cash flows is 8 percent compounded quarterly. Year Cash Flow $ 800 2 880 0 1,470 What is the present value of the cash flows? (Do not round intermediate calculatic and round your answer to 2 decimal places, e.g., 32.16.) Present value
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.
The assumption that the cash flows from an investment project are reinvested at the company's discount rate applies to: Multiple Choice o both the internal rate of return and the net present value methods. o only the internal rate of return method. • only the net present value method. only the net present velue method o neither the internal rate of return nor net present value methods.
18) NET PRESENT VALUE (BASIC)What is the net present value of a project with the following cash flows if the discount rate is 14 percent?
Restate the above net cash flow in real terms. Discount the
restated cash flows at a real discount rate. Assume a 20% nominal
rate and 10% expected inflation. NPV should be unchanged at +2,593,
or $2,593,000.
($ thousands) Period 1 - 14,100 -1,634 3.097 - 14,100 -1,362 2.151 2,593 (sum of PVS) Net cash flow Present value at 20% Net present value 3 6,473 3.746 4 10.684 5,152 5 10,135 4,073 6 5.907 1,978 7 3.419 954 Restate the above...
Assume the appropriate discount rate for the following cash flows is 8.8 percent. Year Cash Flow $1,400 1.300 1,000 800 What is the present value of the cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value
The appropriate discount rate for the following cash flows is 8 percent compounded quarterly. Year Cash Flow $ 800 2 880 0 1,470 What is the present value of the cash flows? (Do not round intermediate calculatic and round your answer to 2 decimal places, e.g., 32.16.) Present value
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