Net Present Value and Correct Answer - 850 Words

uestion 1 (Worth 1 points) Which of the following NOT correct? Independent or non-mutually exclusive alternatives can be accepted at the same time. The modified internal rate of return assumes that inflow are reinvested at 80 percent of the internal rate of return This is a correct answer It is the difference in the reinvestment assumptions that can be significant in determining when to use the present value or internal rate of return methods. Under the net present value method, cash flows are assumed to be reinvested at the firm s weighted average cost of capital Points earned on this question: 1 Question 2 (Worth 1 points) A project has initial costs of $3,000 and subsequent cash inflows in years 1 – 4 of†¦show more content†¦has a lease term equal to 75% or more of the estimated property. is usually short-term and is often cancelable at the option of the lessee This is a correct answer must show up on the balance sheet. none of the above Points earned on this question: 1 Question 7 (Worth 1 points) A project has initial costs of $3,000 and subsequent cash inflows in years 1 – 4 of $1350, 275, 875, and 1525. The company s cost of capital is 10%. Calculate the payback period for this project. 3.33 years This is a correct answer 3.67 years 4.00 years 4.25 years Points earned on this question: 1 Question 8 (Worth 1 points) Leasing is a popular form of financing because... lease provisions are generally less restrictive than a bond indenture the lessor likely has experience with the equipment being leased. the lessee may not be financially able to purchase. all of the above This is a correct answer Points earned on this question: 1 Question 9 (Worth 1 points) One advantage of the payback period method of evaluating investment opportunities is that it provides a rough measure of a project s liquidity and riskiness. True This is a correct answer False Points earned on this question: 1 Question 10 (Worth 1 points) Heavy use of off-balance sheet lease financing will tend to... Make a company appear more risky than it actuallyShow MoreRelatedNet Present Value and Correct Answer2705 Words   |  11 Pagesis CORRECT?Answer | | | | | Selected Answer: | You should recommend Project S, because at the new WACC it will have the higher NPV. | Correct Answer: | You should recommend Project S, because at the new WACC it will have the higher NPV. | | | | | Question 2 2 out of 2 points | | | Which of the following statements is CORRECT?Answer | | | | | Selected Answer: | Multiple IRRs can occur only if the signs of the cash flows change more than once. | Correct Answer: |Read MoreValuation Quiz Essay1381 Words   |  6 PagesPamp;S’s current equity value (rounded to the nearest million dollars). You Answered Correct Answer 5676  margin of error  +/-  2    Question 2 Swamp amp; Sand Industries has the following data. The discount rate is 12%. Terminal value is 3 times FCF. Cash and debt are constant.    Calculate its Enterprise Value.       | 20X1 | 20X2 | 20X3 | Free Cash Flow |   1933 |   1933 |   1933 | Cash |   147 |   147 |   147 | Debt |   435 |   435 |   435 | You Answered Correct Answer 8762.3  margin of error  +/-  3 Read MoreQuiz 7 Cost Accounting1450 Words   |  6 Pagesfacilities? A) capital budgeting B) working capital C) master budgeting D) project-cost budgeting Answer: A Diff: 1 Terms: capital budgeting Objective: 1 AACSB: Reflective thinking 2) The two factors capital budgeting emphasizes are: A) qualitative and nonfinancial B) quantitative and nonfinancial C) quantitative and financial D) qualitative and financial Answer: C Diff: 1 Terms: capital budgeting Objective: 2 AACSB: Reflective thinking 3) The stage of theRead MoreEco 550 Quiz 1 (2013) Essay examples691 Words   |  3 Pagesbe designed to: Correct Answer: create incentives so that managers act like owners of the firm. 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Which statement concerning the net present value (NPV) of an investment or a ï ¬ nancing project is correct? †¢ A ï ¬ nancing project should be accepted if, and only if, the NPV is exactly equal to zero. †¢ An investment project should be accepted only if the NPV is equalRead MoreSterling Household Products Company651 Words   |  3 PagesPlease provide an articulate, concise, and theoretically sound answer. Answers need to be supported with examples from the texts and Exhibits. This may require some due diligence on your part. Please retype the question and your response. 1. How much business risk is associated with Sterling’s proposed acquisition of the germicidal, sanitation, and antiseptic products unit of Montagne Medical? Be sure to define business risk in your answer. 2. Verify the growth rates for sales and inflation