Question 1

-What is the net present value of cash flows using a 7% discount rate for Year 2?

Accepted Answer

A) $163,551.00 
B) $187,250.00 
C) $152,851.78 
D) $200,357.50 
E) Do not have enough information to compute

Question 2

-For the project, how long will it take to recover the initial investments using a discount rate of 20%?

Accepted Answer

A) Less than two years 
B) Between two years and three years 
C) Between three years and four years 
D) Between four years and five years 
E) More than five years

Question 3

Fabricating Solutions is looking at the financials for a CNC machine. The expected life cycle for the machine is 6 years. The initial projected product design costs are $725,000. Fabricating Solutions typically uses a discount rate of 14% for all new product financials.
 
-Calculate the total net present value for the project using a discount rate of 25%.

Accepted Answer

A) $689,777.41 
B) $300,000.00 
C) $725,000.00 
D) -$35,222.59 
E) Do not have enough information to compute

Question 4

Fabricating Solutions is looking at the financials for a CNC machine. The expected life cycle for the machine is 6 years. The initial projected product design costs are $725,000. Fabricating Solutions typically uses a discount rate of 14% for all new product financials.
 
-Calculate the total net present value for the project using a discount rate of 14%.

Accepted Answer

A) $725,000.00 
B) $328,947.37 
C) $120,003.76 
D) $845,003.76 
E) Do not have enough information to compute

Question 5

-Calculate the total net present value for Project Two using a discount rate of 20%.

Accepted Answer

A) $94,000.00 
B) $6,269.29 
C) $93,757.72 
D) -$242.28 
E) Do not have enough information to compute

Question 6

Fabricating Solutions is looking at the financials for a CNC machine. The expected life cycle for the machine is 6 years. The initial projected product design costs are $725,000. Fabricating Solutions typically uses a discount rate of 14% for all new product financials.
 
-For the project, how long will it take to recover the initial investments?

Accepted Answer

A) Less than two years 
B) Between two years and three years 
C) Between three years and four years 
D) Between four years and five years 
E) More than five years

Question 7

-Calculate the total net present value for Project One using a discount rate of 12%.

Accepted Answer

A) $55,357.14 
B) $11,684.12 
C) $85,000.00 
D) $96.684.00 
E) Do not have enough information to compute

Question 8

-What is the net present value of cash flows using a 7% discount rate for Year 3?

Accepted Answer

A) $186,915.89 
B) $163,259.58 
C) $214,000.00 
D) $245,008.60 
E) Do not have enough information to compute

Question 9

-Which of the following statement is TRUE?

Accepted Answer

A) The internal rates of return for both the projects are identical. 
B) The internal rate of return for Project One is higher than the internal rate of return for Project Two. 
C) The internal rate of return for Project One is lower than the internal rate of return for Project Two. 
D) None of these statements are true. 
E) Need additional information to answer the question

Question 10

-The internal rate of return for Project Two is

Accepted Answer

A) 22.13% 
B) 19.81% 
C) 15.64% 
D) 12.35% 
E) 20.98%

Question 11

-What is the net present value of cash flows using a 7% discount rate for Year 5?

Accepted Answer

A) $116,822.43 
B) $89,123.27 
C) $133,750.00 
D) $133,506.66 
E) Do not have enough information to compute

Question 12

-The internal rate of return for Project Two is

Accepted Answer

A) Under 12% 
B) Between 12% and 15% 
C) Between 15% and 18% 
D) Between 18% and 20% 
E) Over 20%

Question 13

-For Project Two, how long will it take to recover the initial investments using a discount rate of 15%?

Accepted Answer

A) Less than one year 
B) Between one year and two years 
C) Between two years and three years 
D) Between three years and four years 
E) More than four years

Question 14

Fabricating Solutions is looking at the financials for a CNC machine. The expected life cycle for the machine is 6 years. The initial projected product design costs are $725,000. Fabricating Solutions typically uses a discount rate of 14% for all new product financials.
 
-Calculate the total net present value for the project using a discount rate of 17%.

Accepted Answer

A) $71,762.95 
B) $320,512.82 
C) $796,762.95 
D) $725,000.00 
E) Do not have enough information to compute

Question 15

-For the project, how long will it take to recover the initial investments using a discount rate of 18%?

Accepted Answer

A) Less than two years 
B) Between two years and three years 
C) Between three years and four years 
D) Between four years and five years 
E) More than five years

Question 16

-For the project, how long will it take to recover the initial investments using a discount rate of 15%?

Accepted Answer

A) Less than two years 
B) Between two years and three years 
C) Between three years and four years 
D) Between four years and five years 
E) More than five years

Question 17

-For Project One, how long will it take to recover the initial investments using a discount rate of 20%?

Accepted Answer

A) Less than one year 
B) Between one year and two years 
C) Between two years and three years 
D) Between three years and four years 
E) More than four years

Question 18

-For Project One, how long will it take to recover the initial investments using a discount rate of 12%?

Accepted Answer

A) Less than one year 
B) Between one year and two years 
C) Between two years and three years 
D) Between three years and four years 
E) More than four years

Question 19

-For Project Two, how long will it take to recover the initial investments using a discount rate of 12%?

Accepted Answer

A) Less than one year 
B) Between one year and two years 
C) Between two years and three years 
D) Between three years and four years 
E) More than four years

Question 20

The product design costs are $75,000. The following table shows the projected cash in-flows. Assume a 4-year lifespan.
 
-Calculate the total net present value for the project using a discount rate of 12%.

Accepted Answer

A) $5,163.82 
B) $75,000.00 
C) $9,078.37 
D) $51,000.00 
E) Do not have enough information to compute

Exam 3: Product Design and Development

-What is the net present value of cash flows using a 7% discount rate for Year 2?

-For the project, how long will it take to recover the initial investments using a discount rate of 20%?

-Calculate the total net present value for Project Two using a discount rate of 20%.

-Calculate the total net present value for Project One using a discount rate of 12%.

-What is the net present value of cash flows using a 7% discount rate for Year 3?

-Which of the following statement is TRUE?

-The internal rate of return for Project Two is

-What is the net present value of cash flows using a 7% discount rate for Year 5?

-The internal rate of return for Project Two is

-For Project Two, how long will it take to recover the initial investments using a discount rate of 15%?

-For the project, how long will it take to recover the initial investments using a discount rate of 18%?

-For the project, how long will it take to recover the initial investments using a discount rate of 15%?

-For Project One, how long will it take to recover the initial investments using a discount rate of 20%?

-For Project One, how long will it take to recover the initial investments using a discount rate of 12%?

-For Project Two, how long will it take to recover the initial investments using a discount rate of 12%?

The product design costs are $75,000. The following table shows the projected cash in-flows. Assume a 4-year lifespan. -Calculate the total net present value for the project using a discount rate of 12%.