The internal rate of return

Assignment Help Financial Management
Reference no: EM13947074

The internal rate of return (IRR) is __________.

A. the discount rate that makes the bond value positive (for premium bonds)

B. the discount rate that makes the NPV greater than zero

C. the discount rate that makes the NPV less than zero

D. the discount rate that makes the NPV equal to zero

Reference no: EM13947074

Questions Cloud

What is the present value of these cash flows : Herm Mueller has invested in a fund that will provide him a cash flow of $11,700 at the end of each of the next 20 years. If the interest rate is 8.5 percent, what is the present value of these cash flows?
What is the amount of interest expense reported : Benson Corporation announced that its net income for the year ended June 30, 2015 is $1,400,000. The company also reported EBITDA of $5,000,000, and depreciation and amortization expense of $1,250,000. If the company's income tax rate is 50 percent, ..
Investor purchased a small strip : Investor purchased a small strip. The contract price $800,000 and the buyer incurred $20,000 in associated purchasing exp., including attorney & appraisal fees, as well as property inspection and survey costs. The land value at the time of this purch..
What is the present value of these bonds : Giant Electronics is issuing 20-year bonds that will pay a semi annual coupon on a face value of $1,000. The coupon rate on the bonds is 7.8 percent per year. If the market rate on these bonds is 7 percent per year, what is the present value of these..
The internal rate of return : The internal rate of return (IRR) is __________.
What is the firms net income : Alpha Corporation has a return on equity (ROE) of 18.70 percent, an equity multiplier of 2.50, sales of $2,750,000, and a total assets turnover of 2.75. What is the firm's net income?
Cost of materials and labor needed to generate these revenue : Rocky Mountain Lumber Company is considering purchasing a new wood saw that costs $50,000. The saw will generate revenues of $100,000 per year for four years.  Rocky Mountain’s tax rate is 34 percent, and its opportunity cost of capital is 10 percent..
Business owners are protected by limited liability : Which of the following business owners are protected by limited liability?
Pay off her loan ahead of schedule : Skylar Masterson borrowed $250,000 to buy her first home at an annual interest rate of 12 percent with monthly payments for 30 years. Ms. Masterson would like to pay off her loan ahead of schedule. What is the remaining unpaid balance when there are ..

Reviews

Write a Review

Financial Management Questions & Answers

  Surface area and volume play a role in marketing products

Discussion surface area and volume play a role in marketing products, such as advantages and disadvantages. Give specific examples and include related information when appropriate, such as surface area, lateral area, cross section, etc.

  Considering new project-will require initial cash investment

The Electrical Engineering Company is considering a new project that will require an initial cash investment of $612,000. The project will produce no cash flows for the first three years. The projected cash flows for years 4 through 8 are $84,000, $1..

  Target debt—equity ratio

Sixx AM Manufacturing has a target debt—equity ratio of 0.54. Its cost of equity is 18 percent, and its cost of debt is 11 percent. If the tax rate is 32 percent, what is the company's WACC?

  What is the amount of the total liabilities

A firm has net working capital of $560. Long-term debt is $3,970, total assets are $7,390, and fixed assets are $3,910. What is the amount of the total liabilities?

  What is the standard deviation of return for the portfolio

The risk-free rate of interest is 2%. Stock AAA has a beta of 1.4 and a standard deviation of return = .40. The expected return on the market portfolio is 9%. Assume CAPM holds. What is the standard deviation of return for the portfolio in (a) above?

  Make a series of deposits into a interest bearing account

You plan to make a series of deposits into a interest bearing account earning 11%. You will deposit $2000 today, $3000 two years from today, and $9000 five years from today. If you withdraw $2000 four years from today and $5000 seven years from today..

  Investment proposal-weighted average cost of capital

Your firm is considering a new investment proposal and would like to calculate the weighted average cost of capital. If the firm's bonds are not frequently traded, how would you go about determining a cost of debt for this company? A preferred stock ..

  What was average real risk-free rate over this time period

You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 12 percent, –9 percent, 20 percent, 17 percent, and 10 percent. What was the average real risk-free rate over this time period?

  The correlation of returns between asset is zero

Consider two assets, A and B. The correlation of returns between asset A and B is zero. Starting with the formula for the variance of a portfolio composed of the two assets, derive an expression for the weight placed in asset A and the weight placed ..

  An investment offers a total return

An investment offers a total return of 14 percent over the coming year. Bill Bernanke thinks the total real return on this investment will be only 8.6 percent.

  What is the current bond price-coupon rate

Great Wall Pizzeria issued 11-year bonds one year ago at a coupon rate of 6.8 percent. If the YTM on these bonds is 9 percent, what is the current bond price?

  Financial information-financial condition of organization

Explain the relationship between financial information and the financial condition of an organization. In other words, why are financial ratios and financial statements used to evaluate the health of an organization?

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