One must know the discount rate of an investment project to compute its: a.   NPV and PI. b.   NPV and IRR. c.   PI NPV IRR and Payback Period. 4.   Payback period and IRR.

Q: a. Calculate the NPV of each project, using a cost of capital of 15%. b. Rank acceptable projects by…

A: Net Present Value: It is the current worth of the project's annual cash flows and the initial cost…

Q: Which of the following statements is correct?       A. If the NPV of a project is greater than 0,…

A: Capital budgeting Capital budgeting is a concept where potential major projects or investments are…

Q: nternal rate of return   For the project shown in the following​ table, calculate the internal rate…

A: IRR is rate at which net present value of the cash flows will be equal to 0 it is calculated using…

Q: How the regular payback periods and discounted payback periods for projects are calculated, after…

A: Pay back period  As name itself indicates that pay back period means that how much time required to…

Q: Calculating Net Present Value of a project is an application of which technique: a. SWOT Analysis.…

A: In order to determine the profitability of the projected investment, Net present value is…

Q: a) A) Calculate the net present value of the investment. Please interpret with the reasons whether…

A: Net present value is present value of future cash flows.

Q: Your firm is considering what has been estimated to be a positive NPV project (NPV > 0).  What can…

A: Net Present Value (NPV) is based on the time value of money and is calculated as the sum of present…

Q: What will happen to the internal rate of return (IRR) of a project if the discount rate is decreased…

A: IRR is the rate where the NPV of the project is ZERO

Q: The general rule for using the weighted-average cost of capital (WACC) in capital budgeting…

A: WACC is the Weighted Average Cost of Capital of a company. A company's capital consists of debt and…

Q: Please explain why the net present value (NPV) method is preferred over the payback method when…

A: NPV method is preferred over payback method because of following reasons 1. NPV method shows project…

Q: Which of the following statements is correct regarding the payback method? Takes account of…

A: Payback period is a tool of capital budgeting used to evaluate projects and investments.

Q: What's the discount payback period of the projects? (compile a spreadsheet) Calculate NPV, PI of a…

A: The discounted payback period is the time required for a project to return its initial investment.…

Q: pted when profitability index will be greater than one b. All statements are corre

A: Profitability index indicates present value of cash inflows as no. of times of present value of cash…

Q: ould you use the Figure below that shows the net present value profile of two projects Y and W to…

A: Internal rate of return of a project is the discount rate at which the NPV of project is 0. The…

Q: formula for the internal rate of return on this project.

A: Note: Since you have posted a question with multiple sub-parts, we will solve the first three…

Q: It is good to compute first the additional benefits that a project can give and the additional cost…

A: Meaning of the given options:: a) Law of supply and demand- The law of demand states that when price…

Q: a. Determine the payback period of each project. b. Which project is acceptable based on payback…

A: Payback period = (Year of last negative cash flow+(Absolute value of last negative cash flow/Next…

Q: Which of the following should you focus when assessing the NPV of a project for a MNC? I.…

A: Net Present Value (NPV) is the technique of capital budgeting which defines the profitability of the…

Q: Explain how a net present value (NPV) profile is used to compare capital projects. How does this…

A: The net present value is the sum of the present value of all the cash flows in the future subtracted…

Q: Define the most important capital budgeting techniques. Name at least two capital budgeting…

A: It refers to the long term investment decisions that has been taken by the top management of a…

Q: The minimum acceptable rate of return vary from project to project for which reason? Select one: a.…

A: Minimum Acceptable Rate of Return (MARR) is the target rate of return used to evaluate the project…

Q: a. Compute the net present value of each project. Which project should be adopted based on the net…

A: Net present value is the result arrived at by subtracting the total outflows in year 0 (or initial…

Q: Describe IRR on Incremental Investmentment When InitialFlows are equal?

A: The internal rate of return (IRR) is a capital budgeting metric used to gauge the benefit of…

Q: What is a capital budgeting technique that generates decision rules and associated metrics for…

A: The capital budgeting technique help to evaluate the acceptibility and rejection of a particular…

Q: Compare capital budgeting decision criteria, Net Present Value (NPV) and Internal Rate of Return…

A: Part (1): Answer: Net present value approach predicts how much a future project would add to the…

Q: Calculate discounted payback period of Project A and B Calculate net present value of A and B Which…

A: solution cash flows given year cash flow A cash flow B 0 -150000 -150000 1…

Q: Which of the following statements is CORRECT?   a.  An NPV profile graph shows how a project's…

A: NPV discount firm's cash flow at firm's cost of capital. NPV profile graph shows relation…

Q: 1. State the criterion for accepting or rejecting independent projects under each of the following…

A: Capital budgeting is a technique to evaluate long term projects. For evaluating, various methods are…

Q: method. Does the project offer an acceptable rate of return? Evaluate the profitability measure…

A: Revenue = $11 *106 Fixed costs = $2*106 Variable cost = $7*106 Depreciation is $2.4 *106 /year  for…

Q: The method that measures a projects return based on present values is the: Internal Rate of Return…

A: The current value of an investment based on the return, which will be received on a predefined…

Q: ) What are the factors affecting the discount rate used in project valuation?

A: Discount rate also called as Weighted average cost of capital is used for discounting future cash…

Q: Which of the following methods of capital budgeting uses the average annual profits for evaluation…

A: Capital budgeting is the process that a business uses to determine which proposed fixed asset…

Q: The cost of capital represents a. the capital outlay required in a project. b. the initial…

A: The Cost of Capital is a representative of cost of the current total capital financing of the…

Q: 8- Which of the following methods of capital budgeting uses the average annual profits for…

A: In the given question we need to choose the correct option from the following given options.

Q: How to determine the initial investment if I have the flows, of the npv and the irr

A: IRR is the rate at which NPV becomes zero.

Q: Discuss the value and limitations of WACC as a discount rate for use in the appraisal of capital…

A: WACC refers to weighted average cost of capital. This is the average cost of capital for a firm and…

Q: Which of the following investment appraisal techniques does not involve discounting? a. NPV b.…

A: Investment appraisal techniques are NPV, IRR, ARR, Payback period, discounted payback period,…

Q: Calculate the following investment appraisal criteria for THREE optional projects (Selection is from…

A: Initial Investment  24000                                     Accounting…

Q: a. If your decision rule is to accept the project with the greater IRR, which project should you…

A: Net present value  is the difference between the present value of cash inflows and the present value…

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: The length of time required to cover the initial outlay of the investment in a project is referred…

A: There are different methods of capital budgeting which help a manager take decision regarding the…

Q: Examine the following statements. (i) Payback period method measure the true profitability of a…

A: Time value of money is a concept that helps in determining the value of future cash flows…