About the discounted payback method is not true

Assignment Help Financial Management
Reference no: EM132003264

1. Which one of the following statements about the discounted payback method is NOT true?

The discounted payback method represents the number of years it takes a project to recover its initial investment.

The discount payback method is a risk indicator.

The expected cash flows from a project are discounted at the cost of capital.

2. The discounted payback method calls for a project to be accepted if the payback period is greater than a target period.

In evaluating capital projects, the decisions using the NPV method and the IRR method may disagree

if the cash flows pattern is unconventional.

the projects are independent.

the projects are mutually exclusive.

both the cash flows pattern is unconventional the projects are mutually exclusive.

Reference no: EM132003264

Questions Cloud

Estimate of the intrinsic value of share of the stock : What is your estimate of the intrinsic value of a share of the stock? What do you expect its price to be one year from now?
Compute the cost of capital for the CFO : As the intern, compute the cost of capital {WACC} for the CFO.
What is the value of company just before current dividend : what is the value of the company just before the current dividend is paid (the cum-dividend value)?
Free cash flow approach to value the firm equity : Use the free cash flow approach to value the firm’s equity.
About the discounted payback method is not true : Which one of the following statements about the discounted payback method is NOT true?
Bond yields will have negative impact on equity prices : Do you think the increase in bond yields will have a negative impact on equity prices?
Modify the mix of debt and equity used in the forecasts : That the company is using far too much debt, and that you should modify the mix of debt and equity used in the forecasts?
What is the intrinsic value of share of xyrong stock : The risk-free rate of return is 8%, the expected rate of return on the market portfolio is 18%, What is the intrinsic value of a share of Xyrong stock?
Calculate the present value of growth opportunities : Find the price at which Analog stock should sell. Calculate the present value of growth opportunities.

Reviews

Write a Review

Financial Management Questions & Answers

  What is average amount of receivables-days sales outstanding

Snider Industries sells on terms of 3/10, net 30. Total sales for the year are $1,619,000. Thirty percent of the customers pay on the 10th day and take discounts; the other 70% pay, on average, 70 days after their purchases. What is the days sales ou..

  Important to regulate and control the supply of money

Why does it seem to be important to regulate and control the supply of money? Why might an investor find a zero-coupon bond an attractive investment?

  Comment on the company business model

Using the information you've collected so far, comment on the company's business model.

  Financing plan for next year include sale of long-term bonds

The McDaniel Company’s financing plans for next year include the sale of long-term bonds with a 12 percent coupon. The company believes it can sell the bonds at a price that will provide a yield to maturity of 10 percent. If the marginal tax rate is ..

  Considering buying machine-What is the NAL of the lease

Super Sonics Entertainment is considering buying a machine that costs $660,000. The machine will be depreciated over four years by the straight-line method and will be worthless at that time. The company can lease the machine with year-end payments o..

  Concept be used to help management analyze the situation

Changes in sales cause changes in profits. Would the profit change associated with sales changes be larger or smaller if a firm increased its operating leverages? Explain your answer. A firm is about to double its assets to serve its rapidly growing ..

  What is the value of alberts growth opportunities

Albert's Company has current earnings of $4.20 per share. The company intends to use part of its earnings for investments that will generate a return of 20%. The cost of capital of Albert's is 15%, and its current stock price is $40. What is the perc..

  Forecast human resources supply and match supply with demand

What effect does low turnover have on the Container Store’s ability to forecast human resources supply and match supply with demand? Do you agree with the Container Store’s decision to allow employees access to all kinds of company information except..

  European call option with a strike price

Consider a 9-month European call option with a strike price of $40 on a stock that sells for $35 today. If the annual risk-free rate (continuously compounded) is 8%, the stock pays no dividends, and the stock's annual volatility is 40%, then the Blac..

  Explain how sensitivity analysis is related to constraints

Explain how sensitivity analysis is related to the constraints. Provide an example.

  Net operating income and net selling price model

A small shopping center is expected to produce net operating income of $24,980 in year 1. You expect NOI to increase by 4 percent per year over an expected holding period of seven years. Property value is expected to increase by 3.5 percent per year...

  Develop a financial leverage chart illustrating the project

How much dollar return of the LTV 50% scenario comes from borrowed money and from equity investment?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd