Exam 5: Net Present Value and Other Investment Rules

You would like to invest in the following project. Camille,your boss,insists that only projects that can return at least $1.10 in today's dollars for every $1 invested can be accepted. She also insists on applying a 10% discount rate to all cash flows. Based on these criteria,you should:

The two fatal flaws of the internal rate of return rule are:

You are analyzing a project and have prepared the following data: Required payback period 2.5 years Required return 8.50% Based on the internal rate of return of _______ for this project,you should _______ the project.

When the present value of the cash inflows exceeds the initial cost of a project,then the project should be:

You are considering a project with the following data: Internal rate of return 8.7% Profitability ratio .98 Net present value -$393 Payback period 2.44 years Required return 9.5% Which one of the following is correct given this information?