Payback period less than its economic life

Assignment Help Financial Management
Reference no: EM132065187

A project with a cash outlay now is followed by positive expected cash flows in the future and a payback period less than its economic life. Is its net present value positive or negative? Explain. Now suppose that the discounted payback period is less than the useful life of the project. Is its net present value positive or negative? Explain.

Reference no: EM132065187

Questions Cloud

What type of credit facility best suits her needs : Justine Oxley currently is not working as she believes her role is to look after her young children. What type of credit facility best suits her needs?
Discuss the major methods of company valuation : Discuss the major methods of company valuation that we have studied.
The recent trend in the banking industry is driven : The recent trend in the Banking industry is driven by the following technological innovations:
Discuss the process of producing strategic plan : Discuss the process of producing a strategic plan for the Bank for next 5 years as a sustainable Bank Leader.
Payback period less than its economic life : A project with a cash outlay now is followed by positive expected cash flows in the future and a payback period less than its economic life.
Call position in european vanilla option have negative delta : Why does a short call position in a European vanilla option have negative delta (?)?
What strategy to help impulse buyers does the book suggest : Which is not an early warning sign of financial trouble to come in the future? What strategy to help impulse buyers does the book suggest?
What is the disadvantage to buying a home : Which of the following is not a step toward purchasing an automobile? What is the disadvantage to buying a home?
What is the bond price and what is the bond duration : A 5 year bond with a yeild of 7% (continuously compounded) pays an 8% coupon at the end of each year. what is the bond's price? what is the bond's duration?

Reviews

Write a Review

Financial Management Questions & Answers

  What is the effective annual rate on this loan

What is the effective annual rate on this loan?

  An asset-or-nothing call delivers the underlying asset

A cash-or-nothing call pays $10 if the underlying asset price is above the strike at expiration and 0 otherwise. Price the call in terms of sigma, K, S0, r, and T under the Black-Scholes assumptions. An asset-or-nothing call delivers the underlying a..

  What is company market capitalization

Smith Corporation has 150,000 shares of stock outstanding, total shareholders equity of $10 million, What is the company's market capitalization?

  Fifo for inventories produced and held in foreign operations

uses LIFO for valuing inventories held in the United States and FIFO for inventories produced and held in its foreign operations.

  What counter-offer would you have to make to bank

what counter-offer would you have to make to the bank in order to achieve the 20% return?

  Sales are expected to increase

Broussard Skateboard's sales are expected to increase by 15% from $8.2 million in 2013 to $9.43 million in 2014. Its assets totaled $3 million at the end of 2013. Broussard is already at full capacity, so its assets must grow at the same rate as proj..

  Bond downgrade and global interaction of bond yields

Bond Downgrade and Global Interaction of Bond Yields. Explain how the downgrading of the bonds affects each of these three parties:

  What is projected net present value of project

ABC co. is analyzing a project with an initial cost of $110,000 and cash inflows of $63,000 in year 1. What is the projected net present value of this project?

  The periodic rate and the effective annual rate related

How are the simple rate, the periodic rate, and the effective annual rate related?

  What is price per share of equity under plan

Cooke Co. is comparing two different capital structures. Plan I would result in 9,000 shares of stock and $430,000 in debt. Plan II would result in 12,600 shares of stock and $275,200 in debt. What is the price per share of equity under Plan I? What ..

  Principal of loan and how much will go toward interest

how much of the payment will go toward the principal of the loan and how much will go toward interest?

  Any initial savings for the down payment

Suppose the buyer does not have any initial savings for the down payment.

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