1. What is the net present value of a project with the following cash flows if the discount rate is 14 percent?

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A. -$3,140.43
B. -$929.90
C. $247.181
D. $1,027.67
E. $1,127.08

2. Timothy is considering an investment of $10,000. This investment is supposedly going to provide him with cash inflows of $2,500 in the first year and $6,000 a year for the following 2 years. At a discount rate of zero percent this investment has a net present value (NPV) of _____, but at the relevant discount rate of 18 percent the project's NPV is:

A. -$1,500; $62.03.
B. -$1,500; $79.54.
C. $4,500; $62.03.
D. $4,500; $79.54.
E. $6,000; $98.48.

3. A project has the following cash flows. What is the payback period?

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A. 2.00 years
B. 2.05 years
C. 2.30 years
D. 2.64 years
E. 2.94 years

4. Deep South Sounds would like to spend $189,000 for new sound equipment. However, the company has a major loan maturing 3 years from today and needs this money at that time to avoid bankruptcy. The sound equipment is expected to increase the cash flows by $45,000 in the first year, $92,400 in the second year, and $40,000 a year for the following 3 years. Should Deep South buy the sound equipment at this time? Why or why not?

A. yes; because the money will be recovered within 2 years
B. yes; because the money will be recovered within the required 3 years C. no; because the project never pays back
D. no; because the money will not be recovered in time to pay the loan E. doesn't matter; because they lose money either way

5. A project has the following cash flows. What is the internal rate of return?

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A. 20.32 percent
B. 21.32 percent
C. 21.54 percent
D. 22.02 percent
E. 22.85 percent

6. You are considering the following two mutually exclusive projects. The crossover point is _____ percent....

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...Time Value of Money
Exercise
1. If you invest $1000 today at an interest rate of 10% per year, how much will you have 20 years from now, assuming no withdrawals in interim?
2. a. If you invest $100 every year from the next 20 years starting one year from today and you earn interest of 10% per year, how much will you have at the end of the 20 years?
b. How much must you invest each year if you want to have $50000 at the end of the 20 years?
3. What is...

...
A project's average net income divided by its average book value is referred to as the project's average:
A. netpresentvalue.
B. internal rate of return.
C. accounting return.
D. profitability index.
E. payback period.
The internal rate of return is defined as the:
A. maximum rate of return a firm expects to earn on a project.
B. rate of return a...

...As Caledonia is considering two additional mutually exclusive projects, for Week’s four assignment, Team D will formulate answers to determine what between Project A and Project B each project’s payback period, netpresentvalue, and internal rate of return. In addition, the team will give an analysis of what caused the ranking conflict and which project should be accepted and why. With a final comment, the team will describe factors...

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Infomercial Entertainment, Inc.
In the good of days—before cable TV, fax machines, and multimedia personal computers—the
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were continued to thirty-and sixty—second messages, grouped together to occupy only two or
three minutes of viewing time. Occasionally, if you stayed up late enough sitting in front of the
tube,...

...Examples Of NetPresentValue (NPV), ROI and
Payback Analysis
Introduction
Terms and Definitions
NetPresentValue - Method of calculating the expected net monetary gain or loss from a project by discounting all expected future cash inflows and outflows to the present point in time.
Discount...

...with the acquisition of the quota of majority of Crysler is found again of forehead, over that to a new market, also to a new coin with all those that can be the risks over how commercial also those financial. Nevertheless, right now, the exchange rate between these two currencies is 1 euro =1.3118 dollars so in order to make easier the case we will use 1.31 to round it up.
The politics of the Group related to the management of the risk of change foresee, as a rule, the...

...Cynthia should employ is true?
1) Cynthia should rank the projects in increasing order of NPV and choose the highest ranked projects in order until the capital available is exhausted.
2) Cynthia should rank the projects in increasing order of internal rate of return and choose the highest ranked projects in order until the capital available is exhausted.
3) Cynthia should calculate the NPV of various combinations of projects and choose that combination that provides the...

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