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What the net present value tends to be

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Reference no: EM132499713

Question 1: The net present value of a project is smaller when:

  1. The required rate of return is higher
  2. The cash inflows are pushed farther into the future
  3. The initial outlay is decreased
  4. Two of the above

Question 2: Which of the following is not one of the negative issues of IRR per class discussion?

  1. Additivity issue
  2. Economies of scale issue
  3. Reinvestment assumption issue
  4. Sign changes in cash flows

Question 3: The net present value tends to be:

  1. always positive.
  2. a decisive investment tool which trumps all others.
  3. easier for managers to interpret than the internal rate of return.
  4. an unlikely valuation metric for corporate financial analysts to use

Reference no: EM132499713

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