Question: I need the answer now. Please just provide an answer to each question. No need to explain. Thank you. If the present value of cash

I need the answer now. Please just provide an answer to each question. No need to explain. Thank you.

  1. If the present value of cash flow X is $240, and the present value of cash flow Y is $160, then the present value of the combined cash flows is:

A) $240. B) $160. C) $80. D) $400.

  1. What is the present value of the following cash flows at a discount rate of 9 percent?

Year 1

Year 2

Year 3

$100,000

$150,000

$200,000

A) $372,431.81 B) $450,000.00 C) $405,950.68 D) $412,844.04

  1. What is the net present value of the following cash flow sequence at a discount rate of 11 percent?

t = 0

t = 1

t = 2

-120,000

300,000

-100,000

A) $69,108.03 B) $231,432.51 C) $80,000.00 D) $88,000.00

  1. You would like to have enough money saved after your retirement such that you and your heirs can receive $100,000 per year in perpetuity. How much would you need to have saved at the time of your retirement in order to achieve this goal? (Assume that the perpetuity payments start one year after the date of your retirement. The annual interest rate is 12.5 percent.)

A) $1,000,000 B) $10,000,000 C) $800,000 D) $1,125,000

  1. If the cash flows for project Z are C0 = -1,000; C1 = 600; C2 = 720; and C3 = 2,000, calculate the discounted payback period for the project at a discount rate of 20 percent.

A) 1 year B) 2 years C) 3 years D) >3 years

  1. The following are some of the shortcomings of the IRR method except

A) IRR is conceptually easy to communicate. B) projects can have multiple IRRs. C) IRR cannot distinguish between a borrowing project and a lending project. D) it is very cumbersome to evaluate mutually exclusive projects using the IRR method.

  1. Project Y has following cash flows: C0 = -800, C1 = +5,000, and C2 = -5,000. Calculate the IRRs for the project.

A) 25 percent and 400 percent. B) 125 percent and 500 percent. C) -44 percent and 11.6 percent. D) No IRRs exist for this project.

  1. The type of the risk that can be eliminated by diversification is called

A) market risk. B) unique risk. C) interest rate risk. D) default risk.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!