About the payback method is true

Assignment Help Financial Management
Reference no: EM13885359

Which ONE of the following statements about the payback method is true?

a. The payback method is consistent with the goal of shareholder wealth maximization

b. The payback method represents the number of years it takes a project to recover its initial investment plus a required rate of return.

c. There is no economic rational that links the payback method to shareholder wealth maximization.

d. None of these statements are true.

Reference no: EM13885359

Questions Cloud

Trade restriction effects on exchange rates : Trade Restriction Effects on Exchange Rates. Assume that the Japanese government relaxes its controls on imports by Japanese companies. Other things being equal, how should this affect the (a) U.S. demand for Japanese yen, (b) supply of yen for sale,..
The hamptons home of a famed socialite hits the market : “Before there was Paris Hilton, there was Consuelo Vanderbilt Balsan – a Gilded Age heiress and socialite, re-nowned for her beauty and wealth. Now Ms. Balsan’s onetime Hamptons home is slated to hit the market priced at $28 million with Tim Davis of..
My business is a salon that serves men and womens : Given your profit and loss projection from last week, do you anticipate needing to borrow money for any reason? Keep in mind the seasonality of your company. You might make a lot of money in the winter, and have essentially no business in the summer ..
Accumulate money for his down payment : John plans to buy a vacation home in 10 years from now and wants to have saved $72,441 for a down payment. How much money should he place today in a saving account that earns 3.79 percent per year (compounded daily) to accumulate money for his down p..
About the payback method is true : Which ONE of the following statements about the payback method is true? The payback method is consistent with the goal of shareholder wealth maximization. There is no economic rational that links the payback method to shareholder wealth maximization.
The gallery expects to bring in additional cash flows : Cortez Art Gallery is adding to its existing buildings at a cost of $2 million. The gallery expects to bring in additional cash flows of $520,000, $700,000, and $1,000,000 over the next three years. Given a required rate of return of 10 percent, what..
Cash flows for a capital project : Given the following cash flows for a capital project, calculate the IRR using a financial calculator year
Markets in order from most efficient to least efficient : Arrange the following markets in order from most efficient to least efficient
Treasury stock method of calculating diluted earnings share : Which statement would be most consistent with the Treasury Stock Method of calculating diluted earnings per share?

Reviews

Write a Review

Financial Management Questions & Answers

  What is the effect of depreciation on his amity

Lorenzo owns two apartment buildings. He acquired forsythia acres on February 21, 1998, for $300,000. Neither apartment complex qualifies for low income housing. if Lorenzo elects to write off the cost of each building as quickly as possible, what is..

  The current cash flow from assets for arras

Schultz Industries is considering the purchase of Arras Manufacturing. Arras is currently a supplier for Schultz, and the acquisition would allow Schultz to better control its material supply. The current cash flow from assets for Arras is $8.0 milli..

  What is the ex-rights price per share

TUV Guy Inc. is proposing a rights offering. There are currently 240,000 shares outstanding at $80 each. There will be 60,000 new shares offered at $60 each. What is the new market value of the company? How many rights are associated with one of the ..

  How do they earn their return on equity

Different companies have different financial ratios. So Return on Equity for any one company is the product of three ratios which may be quite different in value than the same three ratios for a different company.

  Measure free cash flows on firms statement of cash flows

Where would one look to measure free cash flows (FCF) on a firm's statement of cash flows?

  1 calculate the annualized forward premium or discount on

1. calculate the annualized forward premium or discount on six-month forward yen.2. if you are planning to go to japan

  Reasons for any change in importance of residential loans

What is the difference between lending to individual borrowers via a residential home mortgage compared to other types of consumer lending?

  What must the expected return on this stock be

A stock has a beta of 1.18, the expected return on the market is 11.2 percent, and the risk-free rate is 4.85 percent.

  What is the current value of one share of stock

AC Electric just paid a $2.10 per share annual dividend. The firm pledges to increase its dividend by 2.4 percent for the next 5 years and then maintain a constant 2 percent rate of dividend growth. If the required return is 15 percent, what is the c..

  Considering investing in is about to pay quarterly dividend

Jim Johansen noticed that a corporation he is considering investing in is about to pay a quarterly dividend,. The record date is Thursday, March 15. In order for Jim to receive this quarterly dividend, what is the last date he could purchase stock in..

  Why does the firms market value differ from its book value

Why does the firm’s market value differ from its book value? Do you know how to use the Internet to look up financial information on a company? See if you can find market value and book value for Apple.

  How many of the zeroes would you need to issue

Suppose your company needs to raise $36 million and you want to issue 25-year bonds for this purpose. Assume the required return on your bond issue will be 7 percent, and you’re evaluating two issue alternatives: A 7 percent semi-annual coupon bond a..

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