Question: Using the net present value method, the total present value of cash inflows for Project A is $30,000 and the total present value of cash

  1. Using the net present value method, the total present value of cash inflows for Project A is $30,000 and the total present value of cash inflows of Project B is $40,000. If Project A and Project B both require an initial investment of $80,000 and have the same economic life, the project that should be accepted is

a. Project A.

b. Project B.

c. neither.

d. not capable of being calculated.

  1. The net present value rule states that you should accept a project if the NPV:

a. is equal to zero or negative.

b. is less than 1.0.

c. is positive.

d. less the required rate.

  1. The time value of money is explicitly considered in which one of the following capital budgeting method(s)?

  1. Payback method.

b. Net present value (NPV) method.

c. Operating cash-flow method.

d. Book (accounting) rate of return method.

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!

Q:

Using the net present value method, the total present value of cash inflows for Project A is $30,000 and the total present value of cash inflows of project b is $36,000. If project a and project b...

Q:

Using the net present value method, the total present value of cash inflows for Project A is $30,000 and the total present value of cash inflows of Project B is $40,000. If Project A and Project B...

Q:

Multiple Choice Question 140 Using the net present value method, the total present value of cash inflows for Project A is $29700 and the total present value of cash inflows of Project B is $35700. If...

Q:

please do all thank you Question 23 3.34 pts Project A has an NPV of $135,934 and an IRR of 17.1%. Project B has an NPV of $145,400 and an IRR of 16.4%. Which project would you select? O Project A O...

Q:

Question 1 3.34 pts You are in the financial planning and analysis department evaluating a new capital project. The project is considered to have a high level of risk. The company's weighted cost of...

Q:

need help ASAP Question 10 3.34 pts You are preparing a discounted free cash flow analysis for XTR Inc. For year 1 of the projection period XTR expects EBITDA of $1,050,000, deprecation and...

Q:

please answer all thank you Question 29 3.34 pts NuCorp currently has no debt outstanding but can borrow at an interest rate of 5.5%. The company's WACC is 10.25% and assume there are no income...

Q:

Work Inc. is evaluating a capital project using the net present value method. The project has an initial cash outflow of $900,000 and the annual after-tax cash inflows for the project are below. For...

Q:

7.You are preparing a discounted free cash flow analysis for BMY Inc. For year 1 of the projection period BMY expects EBITDA of $700,000, depreciation and amortization of $100,000, capital...

Q:

You are preparing a discounted free cash flow analysis for BMY Inc. For year 1 of the projection period BMY expects EBITDA of $700,000, depreciation and amortization of $100,000, capital expenditures...

Q:

Define and initialise necessary shared semaphores. Write pseudocode for all six processes using semaphores in a way that the relationships above will be always occur Consider the following...

Q:

What benchmarks can be used to add meaning to a computed financial ratio value?

Q:

Contributors to an expanded global trade in recent years have included all of the following except Mutiple Choice a reduction in taiffs. quotas, and other legal barriens to trade. greater ease of...

Q:

A 7 - year callable bond has a coupon rate of 5 % ( paid semi - annually ) . The total term of the bond is 7 years but the bond is callable in 3 years with a prepayment penalty of 1 year s coupon...