False for project whose npv equals zero

Assignment Help Financial Management
Reference no: EM131569527

1. Which one of the following is FALSE for a project whose NPV equals zero?

The project earns more than the required return.

The projects cash outflows are equal to the present value of the cash inflows.

The project will have no impact on firm value.

The IRR is equal to the required rate of return

2. "The market portfolio is currently generating a rate of return of 15%. You are analyzing portfolio XYZ for which you ve measured the required return to be 12%. Based on this information, which one of the following must be true? "

The beta of the market portfolio must be 3.0

Portfolio XYZ is highly affected by swings in the market.

The risk free rate of return must be 3%.

The beta of portfolio XYZ must be less than 1.0

Reference no: EM131569527

Questions Cloud

What are the assumptions in the dividend growth model : Company X has paid constant dividend $2 per share for years. Investors required return is 7%. What are the assumptions in the dividend growth model? Discuss.
Differences in total risk-unsystematic risk-systematic risk : Explain the differences between total risk, unsystematic risk, and systematic risk.
The standard deviation for this portfolio is closest to : The correlation coefficient between the two assets is -0.8. The standard deviation for this portfolio is closest to:
What cost driver is-why it is different from regular cost : Discuss what a cost driver is and why it is different from a regular cost.
False for project whose npv equals zero : Which one of the following is FALSE for a project whose NPV equals zero?
Analytic hierarchy process technique : Carry out a case study of your choice on Analytic Hierarchy Process (AHP) technique.
Plots below the security market line : What would you recommend to an investor who is considering an investment which, plots below the security market line?
How much must it invest today in an asset : If the pension plan needs to accumulate $14 million in 13 years, how much must it invest today in an asset that pays an annual interest rate of 4 percent?
The pension plan is also considering investing : The pension plan is also considering investing $70 million of its cash today at a 3.5 percent annual interest for five years with a commercial bank.

Reviews

Write a Review

Financial Management Questions & Answers

  Yield to maturity is the bond offering

Yield to Maturity A 5.65 percent coupon bond with 18 years left to maturity is offered for sale at $1,035.25. What yield to maturity is the bond offering? (Assume interest payments are semiannual.) (LG7-6)

  Common equity to the firm using the dividend growth model

The estimated cost of common equity to the firm using the dividend growth model is %??

  Grow by maintaining a constant mix of debt and equity

The estimate of how quickly a firm may grow by maintaining a constant mix of debt and equity is called:

  Contemplating leasing diagnostic scanner-nal of lease

You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner. What is the NAL of the lease?

  What must be the discount rate

A stock sells for $50. The next dividend will be $5 per share. If the rate of return earned on reinvested funds is a constant 15% and the company reinvests 20% of earnings in the firm, what must be the discount rate?

  Calculate the expected dividend yield

You buy a share of The Ludwig Corporation stock for $20.70. You expect it to pay dividends of $1.05, $1.17, and $1.3037 in Years 1, 2, and 3, respectively, and you expect to sell it at a price of $31.12 at the end of 3 years. Calculate the expected d..

  Identify any ethical or unethical behavioral issues

Conduct an analysis of your selected organization’s financial statements and identify the organization’s short and long term financing risks in its future financial planning. Evaluate the entire selected organization and identify any ethical or uneth..

  Analysts expect that the cash flows

Analysts expect that the Cash Flows will grow at 2.5% per year in perpetuity. Estimate the price per share of Kimberly Clark.

  Calculate? cobalts net operating profits after taxes

Calculate? Cobalt's net operating profits after taxes (NOPAT?),

  An increase in the yield to maturity of a bond will result

All else being equal, an increase in the yield to maturity of a bond will result in:

  Technology developer-manufacturer in transportation industry

Commitment to Share BuyCo is a privately held technology developer and manufacturer in the transportation industry.

  Collect its receivables on average

Aviva Technology’s operating cycle is 93 days. Its inventory was $121,240 at the end of last year, and the company had a $1.0 million cost of goods sold. How long does it take Aviva to collect its receivables on average?

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