Question

Asked Nov 12, 2019

1 views

true or false?

if we choose to use company's WACC in the calculation of the NPV of a project, we are assuming that the project 1- has the same risk as the average-risk project of the company, and 2- will have constant target capital structure throughout its useful life

Step 1

Answer: True

Step 2

Explanation:

NPV is calculated by discounting all the cash inflows and outflows to its present value. If the discount rate used is the wacc of the company, then the process assumes...

Tagged in

Find answers to questions asked by student like you

Show more Q&A

Q: what is the expected return of the three stock portfolio described below? common stock market val...

A: Calculate the stock portfolio as follows:

Q: You are considering a loan vs a lease for a new piece of equipment. The price of the equipment is $3...

A: The maximum interest rate the lease can be for payments to be equal to the loan payment is 4%.

Q: At age 18, Marcia started depositing $2000 per year at the end of each year into an account earning ...

A: Annuity, A = $ 2,000Rate of interest = r = 12%number of annuities, n = 8

Q: the variance of stock A is .004, the variance of the market .007 and the covariance between the two ...

A: Given that the variance of stock A is 0.004, and variance of the market is 0.007. First we need to c...

Q: Compute Bowling Avenue Inc.'s required rate of return given a beta of.9, risk free rate of 3.25%, an...

A: Calculation of required rate of return:Answer:The required rate of return is 8.425%

Q: You are a management trainee in one of the Manufacturing companies based in Johor, Malaysia. The com...

A: The future cash flows and the discount rate are the two factors on which the value of the firm relie...

Q: Suppose that MNINK Industries’ capital structure features 63 percent equity, 8 percent preferred sto...

A: WACC refers to a firm's weighted average cost of capital. It is the rate that a firm pays to its se...

Q: Debbie invests $5,500 in her IRA account each year for 40 years. If she earns 7% return annually on...

A: We need to use the concept of time value of money to solve the question. According to the concept of...

Q: Prepare an amortization schedule for a five-year loan of $59,000. The interest rate is 7 percent per...

A: Amortization schedule is prepared as follows, formulas for each cell is given in the next screen sho...