Question

ssume that the discount rate of Project B is 15%. Given the following projected cashflow: Time...

  1. ssume that the discount rate of Project B is 15%. Given the following projected cashflow:

    Time

    Cashflow

    DCF

    Year 0

    -1500

    ?

    Year 1

    1000

    869.57

    Year 2

    800

    604.91

    Year 3

    700

    460.26

    Year 4

    500

    285.88

    Q4: The PBP of the project is __

    1.625

    2.125

    1.535

    1.5

10 points   

QUESTION 5

  1. Q5: The DPBP of the project is __ .

    1.75

    2.58

    3.04

    2.06

10 points   

QUESTION 6

  1. Q6: Which of the following statement is correct?

    If the discount rate increases, the PBP and DPBP will both decrease.

    If the discount rate decreases, the DPBP will become shorter than PBP.

    If the discount rate decreases, the PBP will stay the same and DPBP will decrease.

    If the discount rate increase, the PBP and DPBP will both stay the same.
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Homework Answers

Answer #1

The answer is c) If the discount rate decreases, the PBP will stay the same and DPBP will decrease

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