Question

Annual worth analysis is stronger than present worth in
detecting the feasibility of projects:

1- true

2- false

explain the reason of your answer

Answer #1

**True**

If we talk about the term feasible then it means how the project can be done easily or conveniently or any kind of practical approach

In Annual worth analysis is the way by which equivalent uniform annual watch is calculated for every year for the life cycle of the project

So it gives more accuracy for each year distribution of cash flow for the project

If we talk about the present worth analysis then it only tells the present value of the project that is going to complete after any n number of years

1(a). (TRUE or FALSE?) Whenever there is a ranking conflict
between net present value and internal rate of return we generally
suggest that the project with the highest net present value be
chosen.
1(b). (TRUE or FALSE?) The acceptable independent projects can
be ranked by using the IRR methodology, from lowest to the highest
IRR.
1(c). (TRUE or FALSE?) When evaluating proposed projects with
the IRR method, those projects with IRRs that are less than the
required rate of return...

For the following problem, what is the better option? Use the
present worth analysis with an interest rate of 10%.
A
B
Initial cost
$12,500
$8,900
Annual benefit
$6,800
$2,500
Salvage value
$5,000
$8,900
Life in years
2 years
3 years

1. Use the present worth analysis method to determine which
alternative (A or B) one should chose. Assume that the interest i=
8% per year.
A
B
Frist Cost
$6500
$12000
Annual Benefit
$2000
$2300
Salvage Value
$1300
$750
Useful Life in years
5
10
a.) Compute the net present worth of alternative A.
$3630, $3780, $3985, or $4168
b.) Compute the net present worth of alternative B.
$3630, $3780, $3985, or $4168
c.) Which alternative should one choose?
Either...

1) True or False? Analytical studies use groups as the unit of
analysis rather than the individual.
2) True or False? John Snow is said to be the first to employ
quantitative methods to describe population vital statistics.
3) True or False? Descriptive epidemiology refers to studies
that are concerned with characterizing the amount and distribution
of health and disease within a population.
4) True or False? Epidemiology is concerned with the
distribution and determinants of health and diseases, morbidity,...

Question 1
If the projects are independent, the AW at the MARR is
calculated. All the projects with AW equal or greater than zero are
acceptable.
Question 1 options:
True
False
Question 2
One of the cautions when using the ROR method is that is great
technique only for single projects. There is an special procedure
to compare multiple alternatives.
Question 2 options:
True
False
Question 3
Conventional cash flows are also known as non-simple cash
flows.
Question 3 options:...

The payback rule states that you invest in projects with
paybacks less than 3 years.
True
False
What is the NPV of a project with the following cash flows and a
19% discount rate: Year 0: -10, Year 1: 2, Year 2: 3, and Year 3:
7?
-3
-2
-1
1
3.
Should you invest in the above project based on its NPV?
Yes
No
Insufficient data

The annual incremental cash flows from
projects A and B are given below. Both projects have the same
discount rate. Using the logic of time value, which of the
following is true as long as your discount rate is positive?
Project
Start of Year 1
Start of Year 2
Start of Year 3
Start of Year 4
Start of Year 5
Start of Year 6
A
100
100
100
-100
-100
-100
B
-100
-100
-100
100
100
100
Project...

Use present worth analysis to determine whether the following
proposal seems to be justified, if an annual rate of return of 16%,
compounded semi-annually, is desired:
Investments would be $50,000 on January 1, 1995 and $70,000 on
July 1, 1995. Income would be quite irregular, starting at $10,000
each six months beginning January 1, 1996 until, and including,
January 1, 1998. There would be no income after that until July 1,
1999, when $35,000 would be received. Then, there would...

True False Questions
1.
We can calculate the present value of perpetuity by dividing the
annual cash inflow by the required
interest rate.
2.
Capital budgeting can be defined as analyzing alternative long-term
investments and deciding which
which assets may be acquired.
3.
Limited funds being available for investment purposes is never a
consideration in firm
making an investment decision..
4.
In the investment decision making process, the time value of money
should be given
consideration..

1)The modified IRR always leads to the same ranking decision as
NPV for independent projects.
TRUE OR FALSE?
2) Assume a project has normal cash flows, its NPV declines as
the cost of capital increases.
TRUE OR FALSE?

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