5. The net present value (NPV) method of investment project analysis assumes that the project's cash flows are reinvested at the
Answer(s): C
The NPV method is used when the discount rate is specified. It assumes that cash flows from the investment can be reinvested at the particular project's discount rate.
6. The rankings of mutually exclusive investments determined using the internal rate of return method (IRR) and the net present value method (NPV) may be different when
Answer(s): D
The two methods ordinarily yield the same results, but differences can occur when the duration of the projects and the initial investments differ. The reason is that the IRR method assumes cash inflows from the early years will be reinvested at the internal rate of return. The NPV method assumes that early cash inflows are reinvested at the NPV discount rate.
A firm with an 18% desired rate of return is considering the following projects (on January 1 1Year 1): Using the net-present-value (NPV) method, Project A's net present value is
The cash inflow occurs 5 years after the cash outflow, and the NPV method uses the firm's desired rate of return of 18%. The present value of $1 due at the end of 5 years discounted at 18% is .4371. Thus, the NPV of Project A is $(265,460) [($7,400,000 cash inflow x 4371) --$3,500,000 cash outflow].
A firm with an 18% desired rate of return is considering the following projects (on January 1, Year 1):Project B's internal rate of return is closest to
The internal rate of return is the discount rate at which the NPV is zero. Consequently, the cash outflow equals the present value of the inflow at the internal rate of return. The present value of $1 factor for Project B's internal rate of return is therefore 4020 ($4,000,000 cash outflow ÷ $9,950,000 cash inflow). This factor is closest to the present value of $1 for5 periods at 20%.
Amstar Corporation has not yet decided on its hurdle rate for use in the evaluation of capital budgeting projects. This lack of information will prohibit Amstar from calculating a project's
A hurdle rate is not necessary in calculating the accounting rate of return. That return is calculated by dividing the net income from a project by the investment in the project. Similarly, a company can calculate the internal rate of return (IRR) without knowing its hurdle rate. The IRR is the discount rate at which the net present value is $0. However, the NPV cannot be calculated without knowing the company's hurdle rate. The NPV method requires that future cash flows be discounted using the hurdle rate.
Share your comments for Financial CMA exam with other users:
helpful assessment
i am confused about the answers to the questions. do you know if the answers are correct?
hi, please make the dumps available for my upcoming examination.
good practice
so far it is really informative
hi i want it please please upload it
am preparing for exam ,just nice questions
please upload c_tadm_23 exam
can we get tdvan4 vantage data engineering pdf?
want to clear the exam.
could you please upload the dumps of sap c_sac_2302
asm management configuration is about storage
kool thumb up
just passed the az-500 exam this last friday. most of the questions in this exam dumps are in the exam. i bought the full version and noticed some of the questions which were answered wrong in the free version are all corrected in the full version. this site is good but i wish the had it in an interactive version like a test engine simulator.
i can practice for exam
please i need this exam.
i need the dump
i want it bad, even if cs6 maybe retired, i want to learn cs6
i hate comptia with all my heart with their "choose the best" answer format as an argument could be made on every question. they say "the "comptia way", lmao no this right here boys is the comptia way 100%. take it from someone whos failed this exam twice but can configure an entire complex network that these are the questions that are on the test 100% no questions asked. the pbqs are dead on! nice work
very good materials
thanks for your support.
iam impressed with the quality of these dumps. they questions and answers were easy to understand and the xengine app was very helpful to use.
not bad but you question database from isaca
awesome contents
answer to 134 is casb. while data loss prevention is the goal, in order to implement dlp in cloud applications you need to deploy a casb.
are these brain dumps sufficient enough to go write exam after practicing them? or does one need more material this wont be enough?
i did attend the required cources and i need to be sure that i am ready to take the exam, i would ask you please to share the questions, to be sure that i am fit to proceed with taking the exam.
why only give explanations on some, and not all questions and their respective answers?
refresh db knowledge
interested for sap certification
could you please upload practice questions for scr exam ?
please upload free oracle cloud infrastructure 2023 foundations associate exam braindumps
sweating! they are tricky
i never use these dumps sites but i had to do it for this exam as it is impossible to pass without using these question dumps.