When faced with a set of independent projects, one should select (choose the best answer) A. all projects with a positive NPV or an IRR greater than the hurdle rate or a PI greater than one. B. all projects with a PI greater than one. C. all projects with an IRR greater than the hurdle rate D. all projects with a positive NPV or an IRR greater than the hurdle rate. E. all projects with a positive NPV or a PI greater than the one. F. all projects with a positive NPV G. all projects with an IRR greater than the hurdle rate or a Pl greater than one.

When faced with a set of independent projects, one should select (choose the best answer) A. all projects with a positive NPV or an IRR greater than the hurdle rate or a PI greater than one. B. all projects with a PI greater than one. C. all projects with an IRR greater than the hurdle rate D. all projects with a positive NPV or an IRR greater than the hurdle rate. E. all projects with a positive NPV or a PI greater than the one. F. all projects with a positive NPV G. all projects with an IRR greater than the hurdle rate or a Pl greater than one.

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter10: The Basics Of Capital Budgeting: Evaluating Cash Flows

Section10.5: Modified Internal Rate Of Return (mirr)

Problem 4ST

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When faced with a set of independent projects, one should select (choose the best answer) A. all projects with an IRR greater than the hurdle rate or a Pl greater than one. B. all projects with a positive NPV or a Pl greater than the one. all projects with a positive NPV or an IRR greater than the hurdle rate or a PI greater than one. C.all projects with a positive NPV or an IRR grcater than the hurdle rate. D. all projects with a Pl greater than one, all projects with a positive NPV E. all projects with an IRR greater than the hurdle rate
When faced with a set of independent projects, one should select (choose the best answer) a. all projects with a positive NPV or an IRR greater than the hurdle rate or a PI greater than one. b. all projects with a positive NPV or an IRR greater than the hurdle rate. c. all projects with an IRR greater than the hurdle rate d. all projects with an IRR greater than the hurdle rate or a PI greater than one. e. all projects with a positive NPV f. all projects with a positive NPV or a PI greater than the one. g. all projects with a PI greater than one.
When faced with a set of independent projects, one should select (choose the best answer) O all projects with an IRR greater than the hurdle rate O all projects with a positive NPV O all projects with a Pl greater than one. O all projects with a positive NPV or an IRR greater than the hurdle rate. O all projects with an IRR greater than the hurdle rate or a Pl greater than one. O all projects with a positive NPV or a PI greater than the one. O all projects with a positive NPV or an IRR greater than the hurdle rate or a Pl greater than one.
When faced with a set of independent projects, one should select (choose the best answer) all projects with a positive NPV or an IRR greater than the hurdle rate or a Pl greater than one. all projects with a positive NPV all projects with an IRR greater than the hurdle rate or a Pl greater than one. all projects with a positive NPV or an IRR greater than the hurdle rate. all projects with an IRR greater than the hurdle rate all projects with a positive NPV or a Pl greater than the one. all projects with a Pl greater than one.
When faced with a set of independent projects, one should select (choose the best answer) O all projects with a positive NPV or an IRR greater than the hurdle rate. O all projects with an IRR greater than the hurdle rate O all projects with a positive NPV O all projects with a positive NPV or an IRR greater than the hurdle rate or a PI greater than one. O all projects with a positive NPV or a PI greater than the one. O all projects with a Pl greater than one. O all projects with an IRR greater than the hurdle rate or a Pl greater than one.
29....When using the NPV method the decision making rationale includes the following (select all that apply): a.If projects are mutually exclusive, accept the project with the highest positive NPV. b.If projects are independent, accept if the project NPV<0. c.If projects are independent, accept if the project NPV>0 d.If the projects are mutually exclusive, accept the project with lowest NPV.
a. Explain why the IRR may contradict the ranking of NPV and therfore not recmmeneded to use when choosing among mutually exclusive projects.\ (5 lines) b. Give two possible examples of such projects. (choose realistic projects, or actual projects you know of) Exaplain your choice?
When choosing between two projects of different scales, which of the following methodologies is best employed? a. Probability index to rank projects b. Equivalent annuities method c. Replacement chain method d. IRR method
b) Using data provided below, compute appropriate values and fill the table below to help identify the least risky and most risky project among alternatives A, B and C using appropriate criteria. Project EV D D2 Var St. dev Coef.0f Var TT 12 0.2 A 18 0.7 28 0.1 10 0.3 В 22 0.6 32 0.1 11 0.1 C 21 0.8 31 0.1 Where n denotes the profit, P is the probability, EV stand for Expected value, D is the Deviation, D$ denote the deviation square, St. dev is the standard deviation and finally Coef.of Var is the coefficient of variation.
Calculate the NPVs of both Project X and Project Y. Show the NPVs for each project. If the Projects are Independent which would you approve? If the Projects are Mutually Exclusive which would you approve?
PRESENT THE PROJECTS TO BE ACCEPTED WITH THE HIGHEST IRR TO THE LEAST IRR
Complete the decision rule for the ERR method. If, then the project is economically justified.