Correct given project with conventional cash flows

Assignment Help Financial Management

Reference no: EM131976804

1. Two mutually exclusive projects produce the same positive NPV at a discount rate of 11.34 percent. Both projects have 4-year lives. Project A has larger cash flows than Project B in the first two years. Given this information, you know that:

a) It makes no difference which project you accept as long as the discount rate does not exceed 11.34 percent.

b) Project A should always be preferred.

c) One project will be preferred at rates less than 11.34 percent and the other will be preferred at higher rates.

d) Project B must require a smaller investment than Project A at Time 0.

e) Project B should only be accepted if the discount rate is 11.34 percent.

2. Which one of these statements is correct given a project with conventional cash flows?

a . The project will have multiple IRRs.

b. The discounted payback period will be equal to or less than the life of the project.

c. The project's AAR will exceed its IRR.

d. The NPV is positive at the required rate of return.

e. The PI may be greater than, equal to, or less than one.

Reference no: EM131976804

Questions Cloud

Supplier management process as core competency : Does the company view its customer management or supplier management process as a "core competency"?

Explain why the manager may have said it : My plant doesn't have that certainty; it's a world of uncertainty. So LP can't be used here." Do you think this statement has any merit?

What is the allowed depreciation charge for each of six year : A business has purchased an asset it expects to last 6 years. What is the allowed depreciation charge for each of the 6 years?

What should the molar concentrations of benzoic acid : What should the molar concentrations of benzoic acid and sodium benzoate be in a solution that is buffered at a pH of 5.00 and has a freezing point of -2.0?

Correct given project with conventional cash flows : Which one of these statements is correct given a project with conventional cash flows?

Devise programs requiring data manipulation with stl : CSCI251/851 - Advanced Programming - Write C++ code using STL container class objects. - Devise programs requiring data manipulation with STL containers. - Gain

Develop your own set of constraint equation and inequalities : Discuss the similarities and differences between minimization and maximization problems using the graphical solution approaches of LP.

What is effective rate of interest : What is the effective rate of interest? What would the effective rate be if Carey were required to make 12 equal monthly payments to retire the loan?

What is the highest acceptable manufacturing cost : Sid's skins makes a variety of covers for electronic. What is the highest acceptable manufacturing cost for which Sid's would be willing to produce the cover?

User Account

All Pages