Two sets of project cash flows

Assignment Help Financial Management

Reference no: EM131572784

Which of the following statements is correct given the following two sets of project cash flows?

Project A Project B

Year 1 $6,000 $2,000

Year 2 $0 $3,000

Year 3 $2,500 $3,000

Year 4 $2,500 $3,000

A. The cash flow from project B are an annuity, but those of project A are not.

B. Both sets of the Cash Flows have equal present values as of the time zero given a positive discount rate.

C. The present values of Project A cannot be computed because the second cash flow is equal to zero.

D. As long as the discount rate is positive, Project B will always be worth less today than will Project A.

Reference no: EM131572784

Questions Cloud

Calculate the amount of the firm after-tax cash flow : Calculate the amount of the firm's after-tax cash flow from operations?

This growth is expected to continue : This growth is expected to continue. What is the value of this stock at the beginning of 2007 when the required return is 9.1 percent?

Net worth of the bank falls by : If interest rates increase from 5 percent to 6 percent, the net worth of the bank falls by

Calculate the payback period and profitability index : Calculate the payback period, profitability index, net present value, and internal rate of return for the new strip mine.

Two sets of project cash flows : Which of the following statements is correct given the following two sets of project cash flows?

Money did the hedge fund gain or lose from placement : how much money did the hedge fund gain or lose from this placement?

What is the best estimate of the effective borrowing cost : On the following loan, what is the best estimate of the effective borrowing cost if the loan is prepaid in six years?

Calculate the amount of the firm income before tax : Calculate the amount of the firm's income before tax?

Calculate the amount of the firm gross profit : Calculate the amount of the firm's gross profit.

User Account

All Pages