You are watching: A project has the following cash flows. what is the payback period?
The internal rate the return is the: A. Discount rate that causes a project?s aftertax revenue to equal zero. B. Discount price that outcomes in a zero net current value for the project. C. Discount rate that results in a net current value equal to the project\"s initial cost. D. Rate of return required by the project\"s investors. E. Project\"s existing market price of return.
The net present value: A. Decreases together the compelled rate of return increases. B. Is same to the early investment when the interior rate of return is same to the compelled return. C. Method of analysis cannot be used to mutually exclusive projects. D. Ignores cash flows the are remote in the future. E. Is unaffected by the time of an investment\"s cash flows.
Which among the following statements is correct? A. The net present value is a measure of profits expressed in today\"s dollars. B. The net current value is positive as soon as the compelled return above the internal rate that return. C. If the initial price of a task is increased, the net existing value of that project will additionally increase. D. If the internal rate of return amounts to the compelled return, the net existing value will equal zero. E. Net current value is same to one investment\"s cash inflows discounted come today\"s dollars.
D. If the internal rate that return equates to the forced return, the net present value will certainly equal zero.
Which among the adhering to indicates the a project should be rejected? i think the cash flows are normal, i.e., the early stage cash flow is negative. A. Average accounting return that exceeds the requirement B. Payback duration that is shorter than the requirement period C. Optimistic net current value D. Profitability index less than 1.0 E. Inner rate the return that exceeds the compelled return
Which among the complying with statements is correct? A. A longer payback period is wanted over a much shorter payback period. B. The payback rule states the you must accept a task if the payback period is less than one year. C. The payback duration ignores the time value that money. D. The payback ascendancy is biased in donate of long-term projects. E. The payback duration considers the timing and also amount of every one of a project\"s cash flows.
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Which one of the adhering to is the primary advantage of payback analysis? A. Incorporation of the time value the money concept B. Ease of use C. Research study and breakthrough bias D. Arbitrary cutoff allude E. Permanent bias
Which among the complying with methods of evaluation ignores the moment value of money? A. Net existing value B. Internal rate that return C. Discounted cash flow analysis D. Payback E. Benefit index
Which one of the complying with methods of analysis ignores cash flows? A. Profitability index B. Payback C. Average audit return D. Modified interior rate the return E. Internal rate of return
Based ~ above the many recent survey information presented in your textbook, CFOs have tendency to usage which two methods of investment evaluation the many frequently? A. Payback and net present value B. Payback and internal price of return C. Interior rate that return and net present value D. Net current value and also profitability index E. Profitability index and also internal price of return
What is the net present value that a job with the following cash flows if the discount price is 15 percent? Year/Cash Flow0/-481001/156002/289003/15200A. -$2,687.98 B. -$1,618.48 C. $1,044.16 D. $1,035.24 E. $9,593.19
What is the net current value that a project that has an initial cost of $42,700 and also produces cash inflows the $9,250 a year because that 9 years if the discount rate is 14.65 percent?A. $798.48B. $1,240.23C. $1,992.43D. $2,111.41E. $2,470.01
13. A project has the adhering to cash flows. What is the payback period? Year/Cash Flow0/-280001/116002/116003/65004/6500A. 2.38 yearsB. 2.49 yearsC. 2.74 yearsD. 3.01 yearsE. 3.33 years
Auto Detailers is buying some new equipment at a price of $188,900. This equipment will be depreciated top top a straight-line basis to a zero publication value that is eight-year life. The devices is expected to create net earnings of $11,000 a year for the very first four years and $24,000 a year for the last four years. What is the average accounting rate the return?A. 15.48 percentB. 17.76 percentC. 18.09 percentD. 22.68 percentE. 18.53 percent
E. 18.53 percentAAR = <(4 ×$11,000) + (4 ×$24,000)> / 8/($188,900 + 0)/2 = .1853, or 18.53 percent
A project has actually the complying with cash flows. What is the internal rate of return?Year/Cash Flow0/-893001/329002/642003/5800A. 11.21 percentB. 10.47 percentC. 10.72 percentD. 8.57 percentE. 9.19 percent
D. 8.57 percentNPV = 0 = -$89,300 + $32,900 / (1 + IRR) + $64,200 / (1 + IRR)2 + $5,800 / (1 + IRR)3IRR = 8.57%
The Flour Baker is considering a task with the complying with cash flows. Need to this task be accepted based on its inner rate that return if the forced return is 18 percent?Year/Cash Flow0/-490001/95002/262003/38700A. Yes; because the project\"s price of return is 7.78 percentB. Yes; since the project\"s rate of return is 16.08 percentC. Yes; because the project\"s price of return is 19.47 percentD. No; because the project\"s price of return is 19.47 percentE. No; since the project\"s price of return is 16.08 percent
C. Yes; due to the fact that the project\"s price of return is 19.47 percentNPV = 0 = -$49,000 + $9,500 / (1 + IRR) + $26,200 / (1 + IRR)2 + $38,700 / (1 + IRR)3IRR = 19.47 percent The project need to be accepted due to the fact that its IRR is greater than the required return.