What is the net present value of a project with the following cash flows if the discount rate is 13.6 percent? \[\begin{array} { | c | r | } \hline \text { Year } & \text { Cash Flow } \\ \hline 0 & - \$ 63,600 \\ \hline 1 & 18,200 \\ \hline 2 & 34,500 \\ \hline 3 & 35,900 \\ \hline \end{array}\]

A) $406.11 B) $3,643.38 C) $3,207.20 D) -$1,407.92 E) -$5,433.67 A) $406.11 B) $3,643.38 C) $3,207.20 D) -$1,407.92 E) -$5,433.67

You are considering the following two mutually exclusive projects.The crossover point is _____ and Project _____ should be accepted if the discount rate is 14 percent. \[\begin{array} { | r | r | r | } \hline \text { Year } & \text { Project A } & \text { Project B } \\ \hline 0 & - \$ 43,000 & - \$ 43,000 \\ \hline 1 & 18,000 & 29,000 \\ \hline 2 & 18,000 & 14,000 \\ \hline 3 & 28,000 & 21,000 \\ \hline \end{array}\]

A) 13.28 percent; B B) 13.28 percent; A C) 0 percent; B D) 15.96 percent; A E) 15.96 percent; B A) 13.28 percent; B B) 13.28 percent; A C) 0 percent; B D) 15.96 percent; A E) 15.96 percent; B

What is the net present value of a project with the following cash flows if the discount rate is 15 percent? \[\begin{array} { | c | r | } \hline \text { Year } & \text { Cash Flow } \\ \hline 0 & - \$ 48,100 \\ \hline 1 & 15,600 \\ \hline 2 & 28,900 \\ \hline 3 & 15,200 \\ \hline \end{array}\]

A) -$2,687.98 B) -$1,618.48 C) $1,044.16 D) $1,035.24 E) $9,593.19 A) -$2,687.98 B) -$1,618.48 C) $1,044.16 D) $1,035.24 E) $9,593.19

Quattro,Inc.has the following mutually exclusive projects available.The company has historically used a four-year cutoff for projects.The required return is 11 percent. \[\begin{array} { | r | r | r | } \hline \underline { \text { Year } } & \underline { \text { Cash Flow } } & \underline { \text { Cash } } \\ & \underline { ( A ) } & \underline { \text { Flow } ( \mathrm { B } ) } \\ \hline 0 & - \$ 75,000 & - \$ 85,000 \\ \hline 1 & 6,200 & 27,700 \\ \hline 2 & 9,400 & 26,500 \\ \hline 3 & 28,100 & 24,200 \\ \hline 4 & 32,600 & 15,600 \\ \hline \end{array}\] The payback for Project A is ____ while the payback for Project B is ____.The NPV for Project A is _____ while the NPV for Project B is ____.Which project,if any,should the company accept?

A) 3.92 years; 3.64 years; $780.85; $1,211.48; accept both Projects B) 3.92 years; 3.79 years; -$17,108.60; $1,211.48; accept Project B only C) 3.96 years; 3.42 years; -$19,764.06; -$10,566.02; reject both projects D) 3.96 years; 3.42 years; $17,780.85; -$1,211.48; accept Project A only E) 4.06 years; 3.79 years; $211.60; -$7,945.93; accept Project A only A) 3.92 years; 3.64 years; $780.85; $1,211.48; accept both Projects B) 3.92 years; 3.79 years; -$17,108.60; $1,211.48; accept Project B only C) 3.96 years; 3.42 years; -$19,764.06; -$10,566.02; reject both projects D) 3.96 years; 3.42 years; $17,780.85; -$1,211.48; accept Project A only E) 4.06 years; 3.79 years; $211.60; -$7,945.93; accept Project A only

You are considering the following two mutually exclusive projects.The crossover point is _____ percent and Project _____ should be accepted at a discount rate of 9 percent. \[\begin{array} { | r | r | r | } \hline \underline { \text { Year } } & \text { Project A } & \text { Project B } \\ \hline 0 & - \$ 69,000 & - \$ 69,000 \\ \hline 1 & 13,000 & 29,000 \\ \hline 2 & 33,000 & 24,000 \\ \hline 3 & 38,000 & 27,000 \\ \hline \end{array}\]

A) -15.68 percent; B) 11.38 percent; C) -11.38 percent; D) 15.68 percent; E) 14.02 percent; A) -15.68 percent; B) 11.38 percent; C) -11.38 percent; D) 15.68 percent; E) 14.02 percent;

What is the net present value of the following cash flows if the relevant discount rate is 5.75 percent? \[\begin{array} { | c | r | } \hline \text { Year } & \text { Cash Flow } \\ \hline 0 & \$ 11,400 \\ \hline 1 & - 2,500 \\ \hline 2 & - 2,500 \\ \hline 3 & - 9,500 \\ \hline \end{array}\]

A) -$1,482.15 B) -$1,232.68 C) $507.19 D) $1,211.40 E) $1,402.02 A) -$1,482.15 B) -$1,232.68 C) $507.19 D) $1,211.40 E) $1,402.02

What is the payback period for a $16,700 investment with the following cash flows? \[\begin{array} { | c | r | } \hline \text { Year } & \text { Cash Flow } \\ \hline 1 & \$ 2,100 \\ \hline 2 & 6,800 \\ \hline 3 & 6,900 \\ \hline 4 & 7,300 \\ \hline 5 & 5,100 \\ \hline \end{array}\]

A) 3.12 years B) 3.89 years C) 2.12 years D) 3.44 years E) 3.67 years A) 3.12 years B) 3.89 years C) 2.12 years D) 3.44 years E) 3.67 years

Exam 8: Net Present Value and Other Investment Criteria

What is the net present value of a project with the following cash flows if the discount rate is 13.6 percent? Year Cash Flow 0 -\ 63,600 1 18,200 2 34,500 3 35,900

(Multiple Choice)

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Question 21

The Flour Baker is considering a project with the following cash flows.Should this project be accepted based on its internal rate of return if the required return is 18 percent? Year Cash Flow 0 -\ 49,000 1 9,500 2 26,200 3 38,700

(Multiple Choice)

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(28)

Question 22

You are considering the following two mutually exclusive projects.The crossover point is _ and Project _ should be accepted if the discount rate is 14 percent. Year Project A Project B 0 -\ 43,000 -\ 43,000 1 18,000 29,000 2 18,000 14,000 3 28,000 21,000

(Multiple Choice)

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Question 23

What is the net present value of a project with the following cash flows if the discount rate is 15 percent? Year Cash Flow 0 -\ 48,100 1 15,600 2 28,900 3 15,200

(Multiple Choice)

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Question 24

Which one of the following is generally considered to be the best form of analysis if you have to select a single method to analyze a variety of investment opportunities?

(Multiple Choice)

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Question 25

Which one of the following indicates that an independent project is definitely acceptable?

(Multiple Choice)

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Question 26

Quattro,Inc.has the following mutually exclusive projects available.The company has historically used a four-year cutoff for projects.The required return is 11 percent. 0 -\ 75,000 -\ 85,000 1 6,200 27,700 2 9,400 26,500 3 28,100 24,200 4 32,600 15,600 The payback for Project A is __ while the payback for Project B is .The NPV for Project A is _ while the NPV for Project B is __.Which project,if any,should the company accept?

(Multiple Choice)

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Question 27

An investment has conventional cash flows and a profitability index of 1.0.Given this,which one of the following must be true?

(Multiple Choice)

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Question 28

You are considering the following two mutually exclusive projects.The crossover point is _ percent and Project _ should be accepted at a discount rate of 9 percent. Project A Project B 0 -\ 69,000 -\ 69,000 1 13,000 29,000 2 33,000 24,000 3 38,000 27,000

(Multiple Choice)

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Question 29

The Steel Factory is considering a project that will produce annual cash flows of $43,800,$40,200,$46,200,and $41,800 over the next four years,respectively.What is the internal rate of return if the initial cost of the project is $127,900?

(Multiple Choice)

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Question 30

Woodcrafters requires an average accounting return (AAR)of at least 17.5 percent on all fixed asset purchases.Currently,it is considering some new equipment costing $169,700.This equipment will have a four-year life over which time it will be depreciated on a straight-line basis to a zero book value.The annual net income from this equipment is estimated at $7,100,$13,300,$18,600,and $19,200 for the four years.Should this purchase occur based on the accounting rate of return? Why or why not?

(Multiple Choice)

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Question 31

The internal rate of return is unreliable as an indicator of whether or not an investment should be accepted given which one of the following?

(Multiple Choice)

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Question 32

What is the net present value of the following cash flows if the relevant discount rate is 5.75 percent? Year Cash Flow 0 \ 11,400 1 -2,500 2 -2,500 3 -9,500

(Multiple Choice)

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Question 33

Miller Brothers is considering a project that will produce cash inflows of $32,500,$38,470,$40,805,and $41,268 a year for the next four years,respectively.What is the internal rate of return if the initial cost of the project is $184,600?

(Multiple Choice)

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Question 34

What is the payback period for a $16,700 investment with the following cash flows? Year Cash Flow 1 \ 2,100 2 6,800 3 6,900 4 7,300 5 5,100

(Multiple Choice)

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Question 35

Empire Industries is considering adding a new product to its lineup.This product is expected to generate sales for four years after which time the product will be discontinued.What is the project's net present value at a required rate of return of 14.8 percent? Year Cash Flow 0 -\ 62,000 1 16,500 2 23,800 3 27,100 4 23,300

(Multiple Choice)

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Question 36

The payback method of analysis ignores which one of the following?

(Multiple Choice)

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Question 37

Charles Henri is considering investing $37,800 in a project that is expected to provide him with cash inflows of $11,600 at the end of each of the first two years and $20,000 at the end of the third year.What is the project's NPV at a discount rate of 0 percent? At 5 percent? At 10 percent?

(Multiple Choice)

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Question 38

Joe and Rich are both considering investing in a project that costs $25,500 and is expected to produce cash inflows of $15,800 in Year 1 and $15,300 in Year 2.Joe has a required return of 8.5 percent but Rich demands a return of 12.5 percent.Who,if either,should accept this project?

(Multiple Choice)

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Question 39

Which one of the following will occur when the internal rate of return equals the required return?

(Multiple Choice)

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Question 40

What is the net present value of a project with the following cash flows if the discount rate is 13.6 percent? Year Cash Flow 0 -\ 63,600 1 18,200 2 34,500 3 35,900

The Flour Baker is considering a project with the following cash flows.Should this project be accepted based on its internal rate of return if the required return is 18 percent? Year Cash Flow 0 -\ 49,000 1 9,500 2 26,200 3 38,700

You are considering the following two mutually exclusive projects.The crossover point is _ and Project _ should be accepted if the discount rate is 14 percent. Year Project A Project B 0 -\ 43,000 -\ 43,000 1 18,000 29,000 2 18,000 14,000 3 28,000 21,000

What is the net present value of a project with the following cash flows if the discount rate is 15 percent? Year Cash Flow 0 -\ 48,100 1 15,600 2 28,900 3 15,200

Which one of the following is generally considered to be the best form of analysis if you have to select a single method to analyze a variety of investment opportunities?

Which one of the following indicates that an independent project is definitely acceptable?

An investment has conventional cash flows and a profitability index of 1.0.Given this,which one of the following must be true?

You are considering the following two mutually exclusive projects.The crossover point is _ percent and Project _ should be accepted at a discount rate of 9 percent. Project A Project B 0 -\ 69,000 -\ 69,000 1 13,000 29,000 2 33,000 24,000 3 38,000 27,000

The Steel Factory is considering a project that will produce annual cash flows of $43,800,$40,200,$46,200,and $41,800 over the next four years,respectively.What is the internal rate of return if the initial cost of the project is $127,900?

The internal rate of return is unreliable as an indicator of whether or not an investment should be accepted given which one of the following?

What is the net present value of the following cash flows if the relevant discount rate is 5.75 percent? Year Cash Flow 0 \ 11,400 1 -2,500 2 -2,500 3 -9,500

Miller Brothers is considering a project that will produce cash inflows of $32,500,$38,470,$40,805,and $41,268 a year for the next four years,respectively.What is the internal rate of return if the initial cost of the project is $184,600?

What is the payback period for a $16,700 investment with the following cash flows? Year Cash Flow 1 \ 2,100 2 6,800 3 6,900 4 7,300 5 5,100

The payback method of analysis ignores which one of the following?

Charles Henri is considering investing $37,800 in a project that is expected to provide him with cash inflows of $11,600 at the end of each of the first two years and $20,000 at the end of the third year.What is the project's NPV at a discount rate of 0 percent? At 5 percent? At 10 percent?

Joe and Rich are both considering investing in a project that costs $25,500 and is expected to produce cash inflows of $15,800 in Year 1 and $15,300 in Year 2.Joe has a required return of 8.5 percent but Rich demands a return of 12.5 percent.Who,if either,should accept this project?

Which one of the following will occur when the internal rate of return equals the required return?

Introduction to Financial Management

Financial Statements,Taxes,and Cash Flow

Working With Financial Statements

Introduction to Valuation: The Time Value of Money

Discounted Cash Flow Valuation

Interest Rates and Bond Valuation

Equity Markets and Stock Valuation

Making Capital Investment Decisions

Some Lessons From Capital Market History

Risk and Return

Cost of Capital

Leverage and Capital Structure

Dividends and Dividend Policy

Raising Capital

Short-Term Financial Planning

Working Capital Management

International Aspects of Financial Management

Filters

Exam 8: Net Present Value and Other Investment Criteria

What is the net present value of a project with the following cash flows if the discount rate is 13.6 percent? Year Cash Flow 0 -\ 63,600 1 18,200 2 34,500 3 35,900

The Flour Baker is considering a project with the following cash flows.Should this project be accepted based on its internal rate of return if the required return is 18 percent? Year Cash Flow 0 -\ 49,000 1 9,500 2 26,200 3 38,700

You are considering the following two mutually exclusive projects.The crossover point is _____ and Project _____ should be accepted if the discount rate is 14 percent. Year Project A Project B 0 -\ 43,000 -\ 43,000 1 18,000 29,000 2 18,000 14,000 3 28,000 21,000

What is the net present value of a project with the following cash flows if the discount rate is 15 percent? Year Cash Flow 0 -\ 48,100 1 15,600 2 28,900 3 15,200

Which one of the following is generally considered to be the best form of analysis if you have to select a single method to analyze a variety of investment opportunities?

Which one of the following indicates that an independent project is definitely acceptable?

An investment has conventional cash flows and a profitability index of 1.0.Given this,which one of the following must be true?

You are considering the following two mutually exclusive projects.The crossover point is _____ percent and Project _____ should be accepted at a discount rate of 9 percent. Project A Project B 0 -\ 69,000 -\ 69,000 1 13,000 29,000 2 33,000 24,000 3 38,000 27,000

The Steel Factory is considering a project that will produce annual cash flows of $43,800,$40,200,$46,200,and $41,800 over the next four years,respectively.What is the internal rate of return if the initial cost of the project is $127,900?

The internal rate of return is unreliable as an indicator of whether or not an investment should be accepted given which one of the following?

What is the net present value of the following cash flows if the relevant discount rate is 5.75 percent? Year Cash Flow 0 \ 11,400 1 -2,500 2 -2,500 3 -9,500

Miller Brothers is considering a project that will produce cash inflows of $32,500,$38,470,$40,805,and $41,268 a year for the next four years,respectively.What is the internal rate of return if the initial cost of the project is $184,600?

What is the payback period for a $16,700 investment with the following cash flows? Year Cash Flow 1 \ 2,100 2 6,800 3 6,900 4 7,300 5 5,100

The payback method of analysis ignores which one of the following?

Charles Henri is considering investing $37,800 in a project that is expected to provide him with cash inflows of $11,600 at the end of each of the first two years and $20,000 at the end of the third year.What is the project's NPV at a discount rate of 0 percent? At 5 percent? At 10 percent?

Joe and Rich are both considering investing in a project that costs $25,500 and is expected to produce cash inflows of $15,800 in Year 1 and $15,300 in Year 2.Joe has a required return of 8.5 percent but Rich demands a return of 12.5 percent.Who,if either,should accept this project?

Which one of the following will occur when the internal rate of return equals the required return?

Introduction to Financial Management

Financial Statements,Taxes,and Cash Flow

Working With Financial Statements

Introduction to Valuation: The Time Value of Money

Discounted Cash Flow Valuation

Interest Rates and Bond Valuation

Equity Markets and Stock Valuation

Making Capital Investment Decisions

Some Lessons From Capital Market History

Risk and Return

Cost of Capital

Leverage and Capital Structure

Dividends and Dividend Policy

Raising Capital

Short-Term Financial Planning

Working Capital Management

International Aspects of Financial Management

Filters

You are considering the following two mutually exclusive projects.The crossover point is _ and Project _ should be accepted if the discount rate is 14 percent. Year Project A Project B 0 -\ 43,000 -\ 43,000 1 18,000 29,000 2 18,000 14,000 3 28,000 21,000

You are considering the following two mutually exclusive projects.The crossover point is _ percent and Project _ should be accepted at a discount rate of 9 percent. Project A Project B 0 -\ 69,000 -\ 69,000 1 13,000 29,000 2 33,000 24,000 3 38,000 27,000