Question

which of the following is true regarding project analysis? a. npv measures how long it takes...

which of the following is true regarding project analysis?
a. npv measures how long it takes to rcover initial invetment
b. npv measures ho long it takes to make a profit
c. the higher the interest rate the lower the NPV
d. a and c
e. b and c
Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
Option Correct / Incorrect Reason
a Incorrect Payback period measures how long it takes to recover initial investment
b Incorrect

Net present value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows over a period of time. NPV is used in capital budgeting and investment planning to analyze the profitability of a projected investment or project.

It measures economic profit in present value term. It does not tell that how much time require to make profit.
c Correct Net present value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows over a period of time. NPV is used in capital budgeting and investment planning to analyze the profitability of a projected investment or project.
d Incorrect As per above
e Incorrect As per above

Hope you understand the solution.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Which of the following statements about capital investment analysis is most correct? A Although a useful...
Which of the following statements about capital investment analysis is most correct? A Although a useful accounting concept, breakeven analysis has no role in capital investment analysis. B Net present value (NPV) measures a project’s rate of return, while internal rate of return (IRR) measures a project’s dollar return. C An NPV of zero indicates that the project is expected to return the amount of the initial investment, but it will not provide a return on that investment. D On...
Which of the statements below is true? a. The graphic plot of project NPV against discount...
Which of the statements below is true? a. The graphic plot of project NPV against discount rate is called the NPV profile b. NPV profile is always downward sloping, i.e., NPV decreases with higher discount rate c. At the intercept point of the NPV profile with the horizontal axis, the project IRR is zero. d. All of the above e. None of the above
In capital budgeting, which of the measures should be larger than one and accept it? NPV...
In capital budgeting, which of the measures should be larger than one and accept it? NPV IRR MIRR PI 2) An investment project has the following cash flows: CF0 = -1,200,000; C01 – C05 = 300,000 each If the required rate of return is 12%, please calculate PI pf the project. a. 0.51   b. 0.88 c. 0.90   d. 0.99   e. 1.05   f. 1.07   g. 1.11  
NPV and IRR    Benson Designs has prepared the following estimates for a​ long-term project it is...
NPV and IRR    Benson Designs has prepared the following estimates for a​ long-term project it is considering. The initial investment is ​$43,760​, and the project is expected to yield​ after-tax cash inflows of ​$7,000 per year for 10 years. The firm has a cost of capital of 14​%. a.  Determine the net present value​ (NPV) for the project. b.  Determine the internal rate of return​ (IRR) for the project. c.  Would you recommend that the firm accept or reject the​...
NPV and IRR Benson Designs has prepared the following estimates for a​ long-term project it is...
NPV and IRR Benson Designs has prepared the following estimates for a​ long-term project it is considering. The initial investment is $26,940, and the project is expected to yield​ after-tax cash inflows of $3,000 per year for 14 years. The firm has a cost of capital of 8%. a.  Determine the net present value​ (NPV) for the project. b.  Determine the internal rate of return​ (IRR) for the project. c.  Would you recommend that the firm accept or reject the​...
NPV and IRR   Benson Designs has prepared the following estimates for a​ long-term project it is...
NPV and IRR   Benson Designs has prepared the following estimates for a​ long-term project it is considering. The initial investment is ​$84 comma 600​, and the project is expected to yield​ after-tax cash inflows of ​$9 comma 000per year for 15years. The firm has a cost of capital of 13​%. a.  Determine the net present value​ (NPV) for the project. b.  Determine the internal rate of return​ (IRR) for the project. c.  Would you recommend that the firm accept or...
Which of the following statements is (are) true regarding the sales activity variance? (A) Sales activity...
Which of the following statements is (are) true regarding the sales activity variance? (A) Sales activity variance is the actual selling price per unit times the difference between the budgeted units and actual units. (B) If the sales activity variance for sales revenue is unfavorable, then the contribution margin sales activity variance will be unfavorable. Select one: a. Only A is true. b. Only B is true. c. Neither A and B is true. d. Both A and B are...
A project has an NPV of £12,632 when a discount rate of 12% is used and...
A project has an NPV of £12,632 when a discount rate of 12% is used and the same project has an NPV of (£6,935) when a discount rate of 24% is used. The approximate internal rate of return of the project is: Select one: a. 18.5% b. 15.16% c. 20.5% d. 19.75% An investment project costs $10,500 and will generate $4,000 in annual cash flows for five years. What is the exact internal rate of return (IRR)? Select one: a....
NPV and IRR???Benson Designs has prepared the following estimates for a? long-term project it is considering....
NPV and IRR???Benson Designs has prepared the following estimates for a? long-term project it is considering. The initial investment is ?$46,760?, and the project is expected to yield? after-tax cash inflows of ?$5,000 per year for 14 years. The firm has a cost of capital of 9?%. a.??Determine the net present value? (NPV) for the project. b.??Determine the internal rate of return? (IRR) for the project. c.??Would you recommend that the firm accept or reject the? project?
6 Which of the following statements is a true statement relating to Tax Policy Analysis) a....
6 Which of the following statements is a true statement relating to Tax Policy Analysis) a. Administration and ease of compliance are not taken into account in the development of a tax structure. b. The only way to legally avoid a tax is to change your behavior. c. Statutory and Economic Incidence are essentially the same thing. d. All of the above statements are true. 7 Which of the following is a true statement regarding user fees? a. They should...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT