If the sum of the incremental cash flows is negative, what is known about the rate of return on the incremental investment?

Q: Which of the following are correct regarding the frequency of compounding? Choose two.  A) the…

A: The compounding frequency is the number of times interest is paid out or capitalized in the account…

Q: The internal rate of return (IRR) is The same thing as the cost of capital. The discount rate that…

A: IRR is the internal rate of return. It is the rate at which net present value is equal to zero.…

Q: A conservative approach to reinvesting projected cash flows (the reinvestment assumption) would use…

A: “Hey, since there are multiple different questions posted, we will answer first question. If you…

Q: Which of the following is true about present value calculations? Other things remaining equal, the…

A: The value of any cash flow at immediate current date is called the present value(PV) which is…

Q: Assuming that we are not able to accurately predict cash flows , generally decreased risk is thought…

A: Cash flow at risk at risk tells us how changes in market factors can change the future cash flows.…

Q: the discount rate that equates the present value of the cash inflows with the present value of the…

A: In capital budgeting decisions calculate net present value is very important.

Q: If you disounted a set of positive real cash flows with a nominal discount rate and inflation were…

A: Justification:Suppose the positive cash flows are discounted with the inflation rate, which is…

Q: The length of time required for an investment to generate cash flows sufficient to recover its…

A: Net Present Value It is the amount of present value of the cash inflows net of cash outflows. It…

Q: The internal rate of return method assumes that the cash flows over the life of the project are…

A: IRR is the required rate of return for the project to have zero Net Present value.

Q: What refers to the interest rate at which the present work of the cash flow on a project is zero of…

A: The RoR can be used with any asset that was purchased at some point in the past and will provide…

Q: How would a reduction in the cash conversion cycle increase profitability?

A: Cash conversion cycle (CCC): It is a metric that speaks to the time it takes for a business…

Q: Why is it not always possible for the cash borrowed (released) from a project to be reinvested to…

A: We need to use the concept of capital budgeting and internal rate of return to answer the question.

Q: If an investment project will positively affect the cash flows of other products the firm currently…

A: Cannibalization can be defined as the negative effect on the existing business line or the product…

Q: How much is the expected cash flow disregarding other simulations?

A: Capital budgeting is a method used for finding the profitability of investment proposals. It…

Q: An investment is guaranteed to have a unique value of IRR if which of the following is true? a.…

A: Given: The unique IRR value in the investment.

Q: What is Internal Rate of Return - Monthly Fixed Cash Flows with Reversions?  Please provide…

A: The internal rate of return is the one of the discounted techniques of capital budgeting which is…

Q: What can you say about the investment's projected rate of return if the present value of the…

A: In this we have to determine interest rate is below or above the given interest rate.

Q: The net present value: is equal to the initial investment when the internal rate of return is equal…

A: The net present value is determined by, The Net present value (NPV) is defined as the difference…

Q: Describe the process to find the mean and variance of the PW for the incremental cash flows?

A: Identify the Rate, project life. Then Incremental cash flows should be computed.

Q: fe of the project. Which one of the following statements is correct with respect to this…

A: NPV Method assumes that all the cash flows are reinvested at the company's Cost of Capital. IRR…

Q: What is the effect of changes in cash flows, investment cost and cash outflows on profitability…

A: Profitability Index is the ratio that is resulted from dividing the current worth of subsequent year…

Q: A project can have as many different internal rates of return as it has: O changes in the sign of…

A: The internal rate of return (IRR) is used to measure the profitability of investments. It is the…

Q: Does an increase in the long-term growth rate of free cash flowsalways cause an increase in the…

A: Free cash flows are cash flows that are generated within the company from its operating activities…

Q: 1. Which of the following capital budgeting techniques ignores the time value of money? (a) Payback.…

A: Since you have posted multiple questions, we shall be solving the first one for you. In case you…

Q: Which of the following are correct regarding the frequency of compounding? Choose two The more…

A: future value=present value×1+rmm×nwhere,m= frequency of compounding higher the frequency higher is…

Q: Which of the following statements best describes the difference between the IRR method and the MIRR…

A: Note: As per the policy, we are supposed to solve one question at a time. Kindly repost the further…

Q: How can we compute incremental cash flow, and IRR?

A: Incremental cash flows and IRR, both are the terms of Capital Budgeting decisions. Incremental cash…

Q: Incremental cash flow is calculated as (cash flowB− cash flowA), where B represents the alternative…

A: Incremental cash flows are the cash flows that are left after meeting initial cash requirements as…

Q: Which of the following statements is true?   Multiple Choice   When NPV is 0, the IRR is equal to…

A: Net present value (NPV) is the value of all the cash flow of the investment (positive and negative)…

Q: Which of the following statements Is false with respect to the simple rate of return? Multiple…

A: Formula: Simple rate of return = Average profits / Initial investment

Q: Calculate the present value and future value of an uneven cash flow stream.

A: A stream of cash flow is uneven  when all the amounts in the series of cash flows are unequal .i.e.,…

Q: An investment with a positive total cash flow will always outperform an investment that shows…

A: Positive Cash flows are the annual cash inflow that has been received to the organization on yearly…

Q: What are some actions a firm can take to shorten its cash conversion cycle?

A: The cash conversion cycle is the time period between the out flow of cash for purchasing raw…

Q: When the underlying riskiness of free cash flows (FCF) decreases, the value of the project O…

A: Free cash flow refers to funds of the company which is freely available to be repaid to the…

Q: The rate of return that equates the present value of cash inflows and outflows is the: A. hurdle…

A: Introduction: Capital budgeting is an investment criterion or decision making mechanism for…

Q: a. What is the simple payback period for Alternative 1? b. What is the annual worth of Alternative…

A: As per policy we answer only 3 sub questions in a single question.  Please repost the unanswered…

Q: we can still calculate the IRR on incremental cash flows. True or false? Explain with example?

A: True, IRR can be still computed on incremental cash flow. IRRIt is the technique of discounted cash…

Q: te

A: Introduction : The given question relates to the capital budgeting techniques which are used to…

Q: The present value of an investment's future cash flows divided by its initial cost is the: O Net…

A: The present value of an investment is calculated by applying the time value of money concept to the…

Q: A graph of the discounting process shows how the present value of any sum to be received in the…

A: Present value = Future value / (1+rate)^years

Q: The profitability index O will never be greater than 1. O does not take into account the discounted…

A: The profitability index helps to compare the project. It measure the attractiveness of the project.…

Q: According to the Liquidity Preferences Model, these are the expected first impact (short run) coming…

A: Liquidity preference hypothesis could be a demonstrate that proposes that a speculator ought to…

Q: The ____ of an investment is the period of time for the ____ to equal the initial cash outlay.   a.…

A: The payback period refers to the amount of time it takes to recover the cost of an investment.…

Q: A project's internal rate of return (IRR) is the  that forces the PV of its inflows to equal its…

A: Since you have asked a question with multiple parts, we will only solve the first 3 parts for you.…

Q: Which of the following statements is true about the internal rate of return?   a. It is the…

A: The internal rate of return is a financial measure used to measure the attractiveness of a…

Q: Future worth and annual cash flow analysis often require far less computation than rate of return…

A: Rate of return : Computation of Rate of return involves adopting trial and error method. It involves…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.