When evaluating proposed projects with the irr method

Assignment Help Financial Management
Reference no: EM131947729

1. (TRUE or FALSE) We calculate the payback period for a proposed project by adding a project’s positive cash flows, one period at a time, until the sum equals the initial investment.

2. (TRUE or FALSE) When evaluating proposed projects with the IRR method, those projects with IRRs that are greater than the required rate of return are rejected.

3. (TRUE or FALSE) If the project’s IRR is greater than or equal to the hurdle rate (discount rate), the project is rejected.

Reference no: EM131947729

Questions Cloud

Identify strategic change requirements and opportunities : You are required to identify strategic change requirements and opportunities for Bounce Fitness by discussing with a Manager
How many years take to recoup the initial investment : Internal rate of return method shows how many years take to recoup the initial investment.
Construct a portfolio of assets to cover series : Your company wishes to construct a portfolio of assets to cover this series of liabilities, such that it is immunized against interest rate risk right now.
A recent federal trial court decision in federal district : The pre-World War I opinion by the U.S. Supreme Court holding, on re-argument, that a federal income tax was unconstitutional.
When evaluating proposed projects with the irr method : When evaluating proposed projects with the IRR method, those projects with IRRs that are greater than the required rate of return are rejected.
Calculate the yield-to-maturity assuming the investor : Calculate the yield-to-maturity assuming the investor buys the bond at 105, as quoted in the financial press.
What is the amount of the current assets : What is the effective annual rate you'll actually be paying? What is the amount of the current assets?
How does systemic risk differ from systematic risk : What is systemic risk? How does systemic risk differ from systematic risk? Why may one claim that when AIG was engaged in the CDS
Project cash flows equal its initial investment : The IRR is the discount rate that makes the present value of a project's cash flows equal its initial investment.

Reviews

Write a Review

Financial Management Questions & Answers

  About the gift tax liability

How much money can Barry and Mary gift to their children in 2013 without any gift tax liability?

  What is the duration of the company assets

Your company holds the following Assets and Liabilities: What is the duration of the company’s assets?

  Focusing on current ratio-quick ratio and cash ratio

Given the following comparative financial data, conduct a trend analysis focusing on current ratio, quick ratio and cash ratio.

  Value of one-month european call option with strike price

What is the value of a one-month European call option with a strike price of $ 29?

  The GDP deflator used in the revision of the calculation

For the previous estimate of 3.835 trillion, the commerce ministry revised the real GDP of the country to 3.877 trillion. Before any adjustment for inflation was made, the GDP was 4.603 trillion, up from 4.523 trillion. What is the GDP deflator used ..

  The existing spot rate of the canadian dollar

The existing spot rate of the Canadian dollar is $.85. The premium on a Canadian dollar put option is $.04.

  Manufactures time series photographic equipment

Photochronograph Corporation (PC) manufactures time series photographic equipment. It is currently at its target debt−equity ratio of 0.80. It’s considering building a new $53 million manufacturing facility. This new plant is expected to generate aft..

  What is the net present value of the freezer if the required

Joe Meat Corp. is considering replacing its old freezer with a new one that has more capacity. The company estimates that it can sell more meat products with and estimated increase of $15,000. What is the net present value of the freezer if the requi..

  What is the cost of debt for the firm

A company has 10,000 6 percent, 10-year bonds outstanding, with a face value of $1,000, currently trading at 102 percent of face value. The bonds pay interest semiannually. What is the cost of debt for the firm?

  What would be the value of the investment

The treasurer of a major U.S. firm has $36 million to invest for three months. The interest rate in the United States is .24 percent per month. The interest rate in Great Britain is .30 percent per month. What would be the value of the investment if ..

  What is the most profitable price point

You are hired by the health care provider Parma Group. Your boss says, identify the most profitable price point for a new drug. The facts utilized for proper analysis are as follows: 2 million people are using the drug, a survey says for every yearly..

  What role do payables and accruals play in the cash cycle

What is the relationship between days sales outstanding (DSO) and total accounts receivable turnover? Which of balance sheet?

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