Explain the relationship between npv and a firms value

Assignment Help Financial Management

Reference no: EM13947528

1. The net present value is the same as the profit of a project expressed in present dollars. Do you agree or disagree? Explain.

2. Explain the relationship between NPV and a firm's value.

3. What is the cost of capital? What role does it play in capital investment decisions?

4. What is the role that the required rate of return plays in the NPV model? In the IRR model?

5. Explain how the NPV is used to determine whether a project should be accepted or rejected.

6. The IRR is the true or actual rate of return being earned by the project. Do you agree or disagree? Discuss.

7. Explain what a postaudit is and how it can provide useful input for future capital investment decisions, especially those involving advanced technology.

8. Explain why NPV is generally preferred over IRR when choosing among competing or mutually exclusive projects. Why would managers continue to use IRR to choose among mutually exclusive projects?

Reference no: EM13947528

Questions Cloud

What is the accounting rate of return : What is the accounting rate of return? Compute the accounting rate of return for an investment that requires an initial outlay of $300,000 and promises an average net income of $100,000.

Inside air temperature when outside air temperature : Assuming that the occupants' body heat provides a continuous source of 320 W within the igloo, calculate the inside air temperature when the outside air temperature is Too = -40 C. Be sure to consider heat losses through the floor of the igloo.

What was the real u.s. dollar cost : At the same time, the exchange rate changes from FF 1 = $0.15 on January 1 to FF 1 = $0.10 on December 31. What was the real U.S. dollar cost of borrowing francs for the year?

Is this search for intelligent life a scientific mission : The SETI project and other efforts to contact or listen for messages from extraterrestrial life were once funded by our government. Should the government support this endeavor? Is this search for intelligent life a scientific mission

Explain the relationship between npv and a firms value : Explain the relationship between NPV and a firm's value. What is the cost of capital? What role does it play in capital investment decisions?

Atomic layer deposition process : A nanolaminated material is fabricated with an atomic layer deposition process, resulting in a series of protecting the heat-generating devices to which they are attached by conducting thermal energy away from the devices to surrounding, cooler re..

What are the real costs to a british firm of borrowing euro : What are the real costs to a British firm of borrowing Euro? Contrast this cost to its real cost of borrowing pounds.

Delaying reduce the projects coefficient of variation : The firm has a 75% chance if it invests -$1,500 a return of $500 for 7-years, and a 25% chance of returning $25 for 7-years. Assuming that all cash flows are discounted at 10%. Calculate the effect of waiting on the project's risk, using the same dat..

How a firm can legitimately choose among two such projects : Suppose that a firm must choose between two mutually exclusive projects, both of which have negative NPVs. Explain how a firm can legitimately choose among two such projects.

User Account

All Pages