Question

In: Accounting

Question 11 pts The interest rate at which the present worth and the equivalent uniform annual...

Question 11 pts

The interest rate at which the present worth and the equivalent uniform annual worth are equal to 0 is called the internal rate of return.

True
False

Question 21 pts

To determine the internal rate of return, you can calculate net present worth at varying interests and select the interest rate where NPW = 0.

True
False

Question 31 pts

If the internal rate of return of a project is less than your MARR, then the project is viable.

True
False

Question 41 pts

If the internal rate of return of a project is greater than your MARR, then the project is viable.

True
False

Question 51 pts

Which method uses the net cash flows to determine if a project may have more than one possible solution? (type it down).

12pt

Question 61 pts

Which method uses cumulative cash flow to determine if there is one positive rate of return value for a project? (type it down)

12pt

Question 71 pts

When applied correctly, the Internal Rate of Return method will result in a similar decision as present, future or annual worth.

True
False

Solutions

Expert Solution

PLEASE UNDERSTAND THAT WE ARE REQUIRED TO ANSWER FOUR PARTS OF A QUESTION. AS SUCH, REQUEST TO ASK BALANCE PARTS THROUGH A SEPARATE QUESTION.


Related Solutions

Which investment is worth more today at an annual rate 4% interest rate: $1,000 to be...
Which investment is worth more today at an annual rate 4% interest rate: $1,000 to be paid in 8 years or $800 to be paid in 4 years? Which investment is worth more if the interest rate is 6%?
For the cash flows shown, determine the equivalent uniform annual worth in years 1 through 5...
For the cash flows shown, determine the equivalent uniform annual worth in years 1 through 5 at an interest rate of 18% per year, compounded monthly. Year 1 2 3 4 5 Cash Flow, $ 0 0 350,000 350,000 350,000 The equivalent uniform annual worth in years 1 through 5 at an interest rate of 18% per year, compounded monthly is $
Calculate the present worth of 11 uniform payments of $9,000 that begin 1 year from now...
Calculate the present worth of 11 uniform payments of $9,000 that begin 1 year from now at an interest rate of 8% per year. The present worth is $  .
What are the steps to this question: What uniform annual payment for 30 years is equivalent...
What are the steps to this question: What uniform annual payment for 30 years is equivalent to spending $10,000 immediately, $10,000 at the end of 10 years, $10,000 at the end of 20 years, and $2,000 a year for 30 years? Assume an interest rate of 9%. (Ans. $3,558.22)
An interest rate is 7.50% per annum with annual compounding. What is the equivalent rate with...
An interest rate is 7.50% per annum with annual compounding. What is the equivalent rate with continuous compounding? (Answer is in percentage with two decimal place - example 5.35)
The IRR is the interest rate that makes the Present Worth "PW" of all the cash...
The IRR is the interest rate that makes the Present Worth "PW" of all the cash flows (inflows and outflows) equal to zero True False
Suppose the annual effective interest rate on an account is 13.2%. Find the equivalent nominal interest...
Suppose the annual effective interest rate on an account is 13.2%. Find the equivalent nominal interest rate compounded monthly, the effective monthly interest rate, the equivalent discount rate compounded monthly, and the effective monthly discount rate.
Using information from Question 5, determine the better option at interest rate 10% using Present Worth...
Using information from Question 5, determine the better option at interest rate 10% using Present Worth Analysis. Please solve using Excel if possible. Question 5: Consider the following two alternatives that have no salvage value: A B Initial Cost Uniform Annual Benefits Useful life, in years $15,000 $3,000 8 $5,100 $1,800 4
Using information from Question 6, determine the better option at interest rate 15% using Present Worth...
Using information from Question 6, determine the better option at interest rate 15% using Present Worth Analysis. Please solve using Excel if possible. Question 6: A company is considering purchasing the following 4 different pieces of equipment of the same useful life of 5 years. The company can obtain a 15% annual return on its investment in other projects and is willing to invest money on one of the four pieces, as long as it can obtain 15% annual return...
The stated annual interest rate is 2 percent, couponed continuously. What is the equivalent effective annual...
The stated annual interest rate is 2 percent, couponed continuously. What is the equivalent effective annual interest rate (to 6 places past the decimal point) associated with this stated rate?                            Solution                       Ear = (1+2%/1)^1=0.02                       Ear = Exp(0.2)-1 =1.0202-1=2.02% The effective monthly rate is .0025 (i.e., a quarter of a percent per month). If you have a 30-year mortgage for $500,000 with monthly payments, what are your monthly payments? What is the present value (i.e., the value at...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT