Identify the one false statement about the internal rate of return. a. The IRR is also known as the discounted cash flow rate of return, the rate of return, and the return on investment b. The IRR is a ranking method c. The IRR will result in the same investment alternative being recommended as the PW, AW, and FW d. The IRR is the interest rate that makes the PW, AW, and FW equal to zero.
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Identify the one false statement about the
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- You are working as an investment consultant in a firm. You have been provided data for the past 7 years in the Table 4 as follows: Table 4: Investment Data Yr. Investment (Rs. Millions) Returns (Rs. Millions) 1 185 17 2 128 37 3 75 63 4 98 54 5 155 36 6 63 72 7 112 36 Assume your client plans to investment 30 million rupees. Based on this data will you recommend your client to invest. Why or why not? Your recommendations must be supported by complete workings including model(s), relationships between variables (correlations, coefficient of determinations) and graphical visualizations (such as scatter charts).Q50 The significance of the internal rate of return (IRR) is that it tells the firm whether it should invest in a capital project by comparing the IRR to the market rate of interest. Group of answer choices True FalseAn investor has $24,000 to invest in bonds of AAA and B qualities. The AAA bonds yield an average of 6% and the B bonds yield 10%. The investor requires that at least three times as much money should be invested in AAA bonds as in B bonds. How much should be invested in each type of bond to maximize the return? What is the maximum return? Define the variables needed to solve this problem. Organize your given information. (This part NOT graded, but encouraged.) Write the complete linear programming problem, which includes the objective function and all constraints. Graph and make sure all lines are labeled and shaded/solution region is clear and easy to identify. Create a corner point chart. Remember to mark your solution. Answer in a complete sentence or two: How much should be invested in each type of bond to maximize the return? What is the maximum return?
- Explain with a figure NPW plot for a nonsimple investment with multiple rates of return?In order to increase the creativity of its staff, Google invested in a highly uniqueheadquarters building, brimming with indoor leisure activities and places for staff tosocialize. What type of asset-specific investment is this?a. Site-specific investment.b. All other options are correct.c. Physical asset investment.d. Human asset investment.What is capital recovery? A.The income recognized from insurance proceeds received after a capital asset is lost due to a casualty such as theft or fire. B. Matching the income you make from using capital assets with the expenses representing the use of the assets producing the income. C.Using a capital asset that had been previously taken out of service, but is now in use again. D. When the cost of capital assets exceed the gross revenue in the acquisition year.
- TRUE OR FALSE: No need of long exlain 1. The longer the time before the revenues are received, the higher is the net present value of those revenues. 2. The more uncertain the future, the lower should be the discount factor in evaluating an investment. 3. In evaluating an investment, we do not discount the cost regardless of when the cost is incurred.Consider company ABC. Today it is 1st of January 2023 and ABC has just paid a dividend of £3 million. The expected earnings of ABC for the next 30 years are forecast to grow at a rate of 15% per annum. From 1st of January 2053 and onwards the earnings of ABC are expected to grow at a rate of 5%. The required rate of return of ABC is 12% per annum. The current dividend policy of ABC is such that they pay out 50% of its earnings as dividends (assume that they pay their dividends on 1st of January every year). a) Suppose that the dividend payout ratio is expected to stay constant in the future. What is the value of ABC stock? Show and explain your calculations and any assumptions you make. b) Just after the dividend payment on 1st of January 2043, ABC is planning to reduce their dividends and only pay out 40% of its earnings. What is the value of ABC under the new dividend policy? c) Provide a recommendation to the management of ABC as to whether they should increase/cut back on…The rate of net investment 50t2/3 and capital stock at t=0 is 100. Find the capital stock function.
- "All growth models. You are evaluating the potential purchase of a small company that currently generates $42,500 in cash flow after taxes (D0 = $42,500). Based on a review of similar risk investment opportunities, you should earn a return rate of 18% from the proposed purchase. Since you're not very sure about future cash flows, you decide to calculate the value of the company assuming some possibilities for the cash flow growth rate. a) What is the value of the company if cash flows are expected to grow at an annual rate of 0% from now on? b) What is the value of the company if cash flows are expected to grow at a constant annual rate of 7% from now on? c) What is the value of the company if cash flows are expected to grow at an annual rate of 12% for the first 2 years and then, starting from year 3, the growth rate decreases to a constant annual rate of 7%?"John invests 10000 of his savings into opening up a new coffee roasting company over the course of a year the new coffee roasting company earns him a 6% return on his investment if John had not invested his money in the coffee roasting company he could have earned a 5% return by investing the 10000 in the stock market instead thus he did 1% better in the coffee roasting company than he could have done on his alternative investment which kind of cost does this alternative investment represent opportunity cost average total cost fixed cost variable costA bank has $5 million in capital that it can invest at a 5 percent annual interest rate. A group of 50 workers comes to the bank wishing to borrow the $5 million. Each worker in the group has an outside job available to him or her paying $50,000 per year. If the group of workers borrows the $5 million from the bank, however, they can set up a business (in place of working their outside jobs) that returns $3 million in addition to maintaining the original investment. a. If the bank has all of the bargaining power (that is, the bank can make a take-itor- leave-it offer), what annual interest rate will be associated with the repayment of the loan? What will be each worker’s income for the year? b. If the workers have all of the bargaining power (that is, the workers can make a take-it-or-leave-it offer), what annual interest rate will be associated with the repayment of the loan? What will be each worker’s income for the year?