Which of the following is/are true for the average accounting return method of project analysis? I. does not need a cutoff rate II. ignores time value of money II. is based on project's cash flows IV. easily obtainable information for computation Multiple Choice I only I, II, II, and IV

Q: A project is accepted if, Net present value of the project is positive. IRR is lower than cost of…

A: Net Present Value method is used to ascertain whether the proposal should be selected or rejected…

Q: how many of the following investment criteria always use all of a projects cash flows in their…

A: Project cash flows generally refers to cash amount which is generated from investment which ignores…

Q: Which of the following cash flows should not be considered when evaluating a project? Changes in…

A: Following cashflows should not be considered when evaluating a project-

Q: Under which one of the capital budgeting, projects is the sum of all present values of all cash…

A: Capital Budgeting: Capital budgeting is a measurement of the project investment or any purchase of…

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: Which of the following statements is CORRECT? Assume that the project being considered has normal…

A: WACC is the required rate of return, where as IRR is the actual rate of return of the project. NPV…

Q: The Modified Internal Rate of Return (MIRR) is based on : Reinvestment rate, financing rate, and the…

A: MIRR is a discounting rate that compares the present value of future cash inflows to zero year…

Q: Pls help with below homework.

A: Payback period refers to the amount of time it takes for a business or firm to recover the initial…

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: The internal rate of return method assumes that a project's cash flows are reinvested at the:

A: The internal rate of return is a financial analysis tool that is used to estimate the profitability…

Q: The conflicts in project ranking in capital budgeting as per NPV and IRR may arise because of:…

A: Time value of money:   It is a concept that states the money worth we have at present will be more…

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: Why the payback method is often considered inferior to discounted cash flow in capital investment…

A: Payback period is capital budgeting technique which tells how much time will it take for Ann…

Q: Which of the following statements is (are) true about project appraisal methods: (i) NPV is the…

A: (i) NPV is the best measure for project appraisal even when capital is rationed.   There is no such…

Q: which of the following do you need to know to calculate the IRR of a project?. 1. project's…

A: Companies use capital budgeting techniques to evaluate the projects. IRR is internal rate of return.…

Q: return

A: MIRR or the modified internal rate of return assumes that the company's cash flows can be reinvested…

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: Which of the statements below is TRUE regarding capital budgeting? O A. Capital budgeting deals with…

A:

Q: The best model to analyze the project financially is cash flow. Select one: O True O False

A: To evaluate a project for its acceptability, we need to analyze its profit generating ability.…

Q: Which of the following statements is CORRECT? Assume that the project being considered has normal…

A: Since the higher the rate would be lower would be the present value factor..... which means the…

Q: Which one of the following statements is correct concerning the payback rule?   a. The payback…

A: Answer -   Payback Period -  The payback period is the amount of time it will take to recover the…

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: hich methods of evaluating a capital investment project ignore the time value of Multiple Choice Net…

A: A Capital Investment project refers to the expenses involved in a project which will eventually help…

Q: 1) In IRR method the cash flows from a project are reinvested at the cost of capital. II) IRR is the…

A: Answer is A. III and I   Explanation- I) In IRR method the cash flows from a project are reinvested…

Q: I) In IRR method the cash flows from a project are reinvested at the cost of capital. II) IRR is the…

A: Capital budgeting is referred as the process of decision making which is used by companies to…

Q: entify if each of the following would be included or excluded in forecasting cash flows for a…

A: When forecasting future cash flows only those cash flows, which will incur in future [ incremental ]…

Q: Which of the following statements is CORRECT? Assume that the project being considered has normal…

A: It refers to the rate of return that is computed by the company to make a decision of selection of a…

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: Which of the following statements is CORRECT?  Assume that the project being considered has normal…

A: We will solve this problem by eliminating each option. 1) option a:  A project’s NPV is generally…

Q: Which of the following statements related to the internal rate of return (IRR) are correct? I. The…

A: All Four options are correct.

Q: ) IRR may produce multiple rates of return when cash flows are non-conventional. B) IRR is best used…

A: Internal Rate of Return(IRR) is a financial metric for cash flow analysis that compares investments…

Q: The advantage(s) of the discounted payback method over the payback method of project analysis…

A: Discount Payback period: It is used to evaluate the capital budgeting projects. Discount payback…

Q: Which of the following characteristics represent an advantage of the internal rate of return…

A: Internal rate of return (IRR) is the modern technique of capital budgeting whereas accounting rate…

Q: Concerning incremental project cash flow, this is a cost one would never count as a cash flow of the…

A: The increased operating cash flow that a company obtains as a result of taking on a new project is…

Q: In calculating Net Present Value (NPV), which one of the following is not an example of a relevant…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: A project is accepted if, I) II) III) Net present value of the project is positive. IRR is lower…

A: Capital budgeting is referred as the process of decision making which is used by companies to…

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: I) In IRR method the cash flows from a project are reinvested at the cost of capital. II) IRR is the…

A: The internal rate of return is a metric used in financial analysis to estimate the profitability of…

Q: Which of the following statements is CORRECT? Assume that the project being considered has normal…

A: Point 1 is not correct as IRR is not found using this method. Cash flows cannot be compounded at…

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…

Q: Consider the following project cash flow. YEAR CASH FLOW 0 -1000 1 500 2 500 3 500 4 500 5 500 Use…

A: Internal rate of return is the rate at which the future value of future cashflow is equal to cash…