Reference no: EM132623414

Your firm is considering an investment in two projects. Project A has a required rate of return of 14%. Project B has a required rate of return of 15%. The cash flows associated with the projects are shown in the table below.

Question 1: What is the NPV of Project A?

a) 399.62

b) 273.09

c) 150.01

d) 530.29

e) None of the above

Question 2: What is the IRR of Project A?

a) 15.43%

b) 16.27%

c) 14.21%

d) 13.48%

e) None of the above

Question 3:  What is the payback period for Project A?

a) 2.96 years

b) 2.52 years

c) 3.20 years

d) 2.64 years

e) None of the above

Question 4: What is the discounted payback period for Project A?

a) 3.44 years

b) 3.82 years

c) 3.69 years

d) 3.57 years

e) None of the above

Question 5: What is the profitability index associated with Project B?

a) 1.02

b) 1.08

c) 1.06

d) 1.04

e) None of the above

Question 6: What is the modified internal rate of return for Project A, if the re-investment rate is the equal to the required rate of return on the project?

a) 14.70%

b) 15.18%

c) 15.66%

d) 14.22%

e) None of the above

Question 7: If investors cannot use past prices and public information to out-perform the market, then the market is said to be?

a) weak form efficient

b) strong form efficient

c) in equilibrium

d) semi-strong form efficient

e) none of a, b, c or d is correct