Homework Answers
MARR s the minimum average rate of return
It t is the minimum rate of return that is the company is accepting before investing in a project.
Internal rate of return is a rate of return that companies expecting from a project so that it do not face any losses .
when present worth is positive, it means the internal rate of return is greater than minimum average rate of return because the company is making a profit here.
So IRR>MARR
OPTION C IS TRUE
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15. Which of the following statements is correct for a project with positive net present worth...
8. Which of the following statementele mele wing statements is correct for a project with a...
8. Which of the following statementele mele wing statements is correct for a project with a positive NPV? A) IRR exceeds the cost of capital B) Accepting the project has an indeterminate effect on shareholders C) The discount rate exceeds the cost of capital. D) The profitability index equals one. 9. If the net present value of a project which costs $20,000 is $5,000 when the discount rate is 10%, then the: A) project's IRR equals 10%. B) project's rate...
U. LASI TUWS Must te positive Lave you 16. Which of the following would you feel safest in accepting? Assume MARR t...
U. LASI TUWS Must te positive Lave you 16. Which of the following would you feel safest in accepting? Assume MARR to be 12% for each proje (Hint: Consider IRR/PW graph) a. "A" has a small but negative net present worth. "B" has a positive net present worth when discounted at 10%. c. "C's" cost of capital exceeds its rate of return. d. "D" has a zero net present worth when discounted at 14%.
Which of the following statements is most correct? Group of answer choices If a project with...
Which of the following statements is most correct? Group of answer choices If a project with normal cash flows has an IRR, which exceeds the cost of capital (required rate of return), then the project must have a positive NPV. If the IRR of Project A exceeds the IRR of Project B, then Project A must also have a higher NPV. Assuming a project has normal cash flows, the NPV will be positive if the IRR is less than the...
8) Project A has an internal rate of return (IRR) of 15 percent. Project B has...
8) Project A has an internal rate of return (IRR) of 15 percent. Project B has an IRR of 14 percent. Both projects have a required retum of 12 percent. Which of the following statements is MOST correct? A) Project A must have a higher NPV than Project B. B) Both projects have a positive net present value (NPV) C) Project B has a higher profitability index than Project A. D) If the required return were less than 12 percent,...
Which one of the following statements is correct? a) The net present value is a measure...
Which one of the following statements is correct? a) The net present value is a measure of profits expressed in today's dollars. b) The net present value is positive when the required return exceeds the internal rate of return. c) If the initial cost of a project is increased, the net present value of that project will also increase. d) Net present value is equal to an investment's cash inflows discounted to today's dollars.
Compute the net present worth (NPW) of the cash flows described in table below for investment...
Compute the net present worth (NPW) of the cash flows described
in table below for investment being considered by MGM Industries in
Georgia. MARR =6%
Question 2 10 pts Compute the net present worth (NPW) of the cash flows described in table below for investment being considered by MGM Industries in Georgia. MARR-6% Year 1-10 11-15 16-25 26-30 Cash Flow -$200K10K 20K 5K 30K
And explain why ? 14. Which one of the following statements is correct given the following...
And explain why ?
14. Which one of the following statements is correct given the following two sets of project cash flows? Project A S6,000 Project B S2.000 Year 1 Year 2 3.000 Year 3 Year 4 2.500 3,000 2,500 3,000 A. The cash flows for Project B are an annuity, but those of Project A are not. B. Both sets of cash flows have equal present values as of time zero given a positive discount rate. C. The present...
Consider the following cash flows and present-worth profile. Year 0 1 2 3 Net Cash Flows...
Consider the following cash flows and present-worth profile. Year 0 1 2 3 Net Cash Flows ($) Project 1 Project 2 - $930 - $930 500 300 700 Y Х 1,000 Click the icon to view the NPW plot. More Info - X (a) Determine the values of X and Y. The value of X is $ (Round to the nearest dollar.) The value of Y is $ (Round to the nearest dollar.) (b) Calculate the terminal project balance of...
Which of the following statements are correct? I. A positive net present value signals an accept...
Which of the following statements are correct? I. A positive net present value signals an accept decision. II. Projects should be accepted when the profitability index is greater than 1. III. A payback period that is less than the required period signals an accept decision. IV. When the internal rate of return exceeds the required return, a project should be accepted.
Which of the following statements is CORRECT? Assume that the project being considered has normal cash...
Which of the following statements is CORRECT? Assume that the project being considered has normal cash flows, with one outflow followed by a series of inflows. Group of answer choices A) If a project's IRR is positive, then its NPV must also be positive. B) A project's IRR is the discount rate that causes the PV of the inflows to equal the project's cost. C) If a project's IRR is smaller than the WACC, then its NPV will be positive....
8. Which of the following statementele mele wing statements is correct for a project with a positive NPV? A) IRR exceeds the cost of capital B) Accepting the project has an indeterminate effect on shareholders C) The discount rate exceeds the cost of capital. D) The profitability index equals one. 9. If the net present value of a project which costs $20,000 is $5,000 when the discount rate is 10%, then the: A) project's IRR equals 10%. B) project's rate...
U. LASI TUWS Must te positive Lave you 16. Which of the following would you feel safest in accepting? Assume MARR to be 12% for each proje (Hint: Consider IRR/PW graph) a. "A" has a small but negative net present worth. "B" has a positive net present worth when discounted at 10%. c. "C's" cost of capital exceeds its rate of return. d. "D" has a zero net present worth when discounted at 14%.
8) Project A has an internal rate of return (IRR) of 15 percent. Project B has an IRR of 14 percent. Both projects have a required retum of 12 percent. Which of the following statements is MOST correct? A) Project A must have a higher NPV than Project B. B) Both projects have a positive net present value (NPV) C) Project B has a higher profitability index than Project A. D) If the required return were less than 12 percent,...
Compute the net present worth (NPW) of the cash flows described
in table below for investment being considered by MGM Industries in
Georgia. MARR =6%
Question 2 10 pts Compute the net present worth (NPW) of the cash flows described in table below for investment being considered by MGM Industries in Georgia. MARR-6% Year 1-10 11-15 16-25 26-30 Cash Flow -$200K10K 20K 5K 30K
And explain why ?
14. Which one of the following statements is correct given the following two sets of project cash flows? Project A S6,000 Project B S2.000 Year 1 Year 2 3.000 Year 3 Year 4 2.500 3,000 2,500 3,000 A. The cash flows for Project B are an annuity, but those of Project A are not. B. Both sets of cash flows have equal present values as of time zero given a positive discount rate. C. The present...
Consider the following cash flows and present-worth profile. Year 0 1 2 3 Net Cash Flows ($) Project 1 Project 2 - $930 - $930 500 300 700 Y Х 1,000 Click the icon to view the NPW plot. More Info - X (a) Determine the values of X and Y. The value of X is $ (Round to the nearest dollar.) The value of Y is $ (Round to the nearest dollar.) (b) Calculate the terminal project balance of...
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