Question

In: Finance

Other factors being constant, NPV of an international project is__ related to consumer demand and __ related to the project's salvage value.

Other factors being constant, NPV of an international project is__ related to consumer demand and __ related to the project's salvage value.

a.positively; positively

b.positively; negatively

c.negatively; positively

d.negatively; negatively

Solutions

Expert Solution

Option a is correct

NPV of an international project is positively related to consumer demand and positively related to the project's salvage value, all else being equal.

In other words, an increase in consumer demand will increases the NPV and vice versa.

And, an increase in salvage value increases NPV and vice versa.

These factors are not negatively related to NPV and hance other answer options are incorrect

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

If the IRR for a project is 20%, then the project's NPV would be:
If the IRR for a project is 20%, then the project's NPV would be:
Other factors constant, what will cause a change in the firms demand curve?
Other factors constant, what will cause a change in the firms demand curve?
The factors affecting demand other than price such as consumer tastes and preferences, the level of...
The factors affecting demand other than price such as consumer tastes and preferences, the level of consumer income, prices for other related goods, the availability of close substitutes, expectations of future price changes cause a shift in the demand curve. Indicate that as well as an example, demonstrating a shift to the left or right for each one.
?Explain how international trade flows are influenced by economic factors and other factors (Factors Affecting International...
?Explain how international trade flows are influenced by economic factors and other factors (Factors Affecting International Trade Flows)
If a project's net present value (NPV) is positive, its internal rate of return (IRR) must...
If a project's net present value (NPV) is positive, its internal rate of return (IRR) must be ______ the firm's required rate of return (r) a. less than b. greater than c. equal to
A project has an unlevered NPV of $1.5 million. To finance the project, debt is being...
A project has an unlevered NPV of $1.5 million. To finance the project, debt is being issued with associated flotation costs of $60,000. The flotation costs can be amortized over the project's 5-year life. The debt of $10 million is being issued at the market interest rate of 10 percent paid annually, with principal repaid in a lump sum at the end of the fifth year. The firm's tax rate is 21 percent. What is the project's adjusted present value...
Equipment was purchase on April 1, 2013 with no salvage value for $308,000. It is being...
Equipment was purchase on April 1, 2013 with no salvage value for $308,000. It is being depreciated over 7 years. Prepare a straight-line depreciation shcedule and a double-declining depreciation schedule.
1. What is the net present value (NPV) of the project? 2. Based on this NPV,...
1. What is the net present value (NPV) of the project? 2. Based on this NPV, should Hasbro undertake this project? 3. What is the internal rate of return (IRR) of this project? You can find IRR by varying the discount rate in your table until NPV is zero. That new discount rate will be the IRR. Your grade will be based on the completeness of your cash flow table and calculations as well as your answers above. Monopoly expansion...
1. What is the net present value (NPV) of the project? 2. Based on this NPV,...
1. What is the net present value (NPV) of the project? 2. Based on this NPV, should Hasbro undertake this project? 3. What is the internal rate of return (IRR) of this project? You can find IRR by varying the discount rate in your table until NPV is zero. That new discount rate will be the IRR. Your grade will be based on the completeness of your cash flow table and calculations as well as your answers above. Monopoly expansion...
NET PRESENT VALUE...: NPV are there other tools we can use beyond NPV, what are they?...
NET PRESENT VALUE...: NPV are there other tools we can use beyond NPV, what are they? And what is the difference between a screening decision and a preference decision?
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT