Which of the following variables is required in the net present value formula? discount rate projections...

Which of the following variables is required in the net present value formula?
- discount rate
- projections of expected cash flow from the investment over time
- initial investment amount
- All of the above.
Dividends, interest, rents, or other income can be ___________.
- discount rates
- managerial accounting
- cash inflows
- traditional financial accounting
If the net present value is greater than zero, it is an investment that you should make.
- True
- False
__________ is the discount rate at which the net present value equals zero.
- NPV
- CAPM
- ARR
- IRR
We can effectively use the NPV method to rank projects
- True
- False
If the internal rate of return is less than the rate of return you require on the investment, you ________ the investment.
- reject
- accept
- consider
- pay
The _____________ is defined as the net present value of an opportunity divided by the amount of the initial investment.
- discount rate
- net present value
- profitability index
- annual rate of return

Expert Solution

ekkarill92 answered 1 year ago

Given the following cash flows and a discount rate of 9.5%, the net present value is...

Given the following cash flows and a discount rate of 9.5%, the net present value is closest to: CF0 $ (27.50) CF1 $ 8.75 CF2 $ 11.30 CF3 $ 14.90 St. Lawrence Ventures had cash flow from assets in 2014 of $1,875 (all values in thousands). The company paid interest expense of $370 and the cash flow to shareholders was $1,425. St. Lawrence: ct an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer....

What is the net present value of the following cash flows if the relevant discount rate...

What is the net present value of the following cash flows if the relevant discount rate is 9 percent? Year Cash Flow 0 -11,520 1 81 2 650 3 880 4 2300 5 15,800 A) $1,300.54 B) $1,913.12 C) $1,679.22 D) $1,022.87 E) $1,506.54 45) SNR is considering a project with an initial cost of $50,000. The project will produce cash inflows of $10,000 a year for the first two years and $12,000 a year for the following three years....

Explain the net present value formula and also explain what the net present value represents.

The relationship between a Net Present Value (NPV) and a discount rate could best be described...

The relationship between a Net Present Value (NPV) and a discount rate could best be described as? Direct Random Stochastic Indirect Indeterminant

Use four alternative discount rate values to investigate the sensitivity of the present value of net...

Use four alternative discount rate values to investigate the sensitivity of the present value of net benefits of the dam in exercise (3) to the assumed value of the real discount rate. What is the internal rate of return (breakeven discount rate)? What do you conclude? That is, how sensitive is your project assessment to the changes of the real discount rate?

as the minimum required rate of return increases for an investment project, the net present value...

as the minimum required rate of return increases for an investment project, the net present value if the project... a. increase b. does not change c. decreases d. becomes positive

Calculate the net present value (NPV) for both projects usingthe crossover rate as your discount...

Use the following information to answer the next three questions. Consider the cash flows from two mutually exclusive projects: Cash FlowYearProject AProject B0-$420,000-$420,0001$140,000$400,0002$230,000$110,0003$331,000$140,000The appropriate discount rate is 8.5%.Calculate the net present value (NPV) for both projects using the crossover rate as your discount rate. Round both NPVs to the nearest dollar.

Using a discount rate of 14 percent, calculate the net present value (NPV) of the proposed investment.

Beacon Company is considering automating its production facility. The initial investment in automation would be $9.40 million, and the equipment has a useful life of 8 years with a residual value of $1,000,000. The company will use straight-line depreciation. Beacon could expect a production increase of 38,000 units per year and a reduction of 20 percent in the labor cost per unit. Current (no automation) Proposed (automation) 77,000 units 115,000 units Production and sales volume Per Unit Total...

What is the present value of the following cash flows at a discount rate of 6%?...

What is the present value of the following cash flows at a discount rate of 6%? Years 1 – 5 $10,000 Years 6 – 10 $12,000 Years 11 – 20 $15,000 A. $109,896 B. $119,157 C. $141,544 D. $129,639 If a professor currently earns $80,000 per year and expects annual salary increases of 3%, approximately how long will the professor have to work before his/her annual salary reaches $500,000 per year? A. 62 years B. 49 years C. 101 years...

If the discount rate is 12%, what is the present value of the following cash flows:...

If the discount rate is 12%, what is the present value of the following cash flows: Year Cash Flow 1 $10,000 2 $11,000 3 $12,000 4 $13,000 5 $14,000 6-15 $15,000 each year a. $144,618 b. $90, 537 c. $127,923 d. $127,197

Question