Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. You are considering a project that costs $300 and has expected cash flows of $110, $121 and $133.10 over the next three years. If

1. You are considering a project that costs $300 and has expected cash flows of $110, $121 and $133.10 over the next three years. If the appropriate discount rate for the project's cash flows is 10%, what is the net present value of this project?

A) The NPV is negative

B) $0.00

C) $0.71

D) $19.79

E) $64.10

2. A project costs $475 and has cash flows of $100 for the first three years and $75 in each of the project's last five years. What is the payback period of the project?

A) The project never pays back

B) 4.75 years

C) 5.00 years

D) 5.33 years

E) 6.00 years

3. A project costs $475 and has cash flows of $100 for the first three years and $75 in each of the project's last five years. If the discount rate is 10%, what is the discounted payback period?

A) The project never pays back on a discounted basis

B) 5 years

C) 6 years

D) 7 years

E) 8 years

4. Suppose a firm invests $600 in a project. The initial cost is depreciated straight-line to zero over 3 years. Net income from the project is $100, $125 and $140 in each of the three years of the project's life. What is the average accounting return?

A) 18.25%

B) 20.28%

C) 35.49%

D) 40.56%

E) 60.83%

plz choose an answer and explain why with formula

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Investments

Authors: Zvi Bodie, Alex Kane, Alan Marcus, Stylianos Perrakis, Peter

8th Canadian Edition

007133887X, 978-0071338875

More Books

Students also viewed these Finance questions