answer questions 1-7
al budgeting Flashcards and * + courses/8977/quizzes/52666/take PV (Net present value) = PV - Cost PV = FV/(1+r)N Profitability Index (PI) = PV/Cost D Question 1 1.25 pts is the interest rate that makes NPV equal to zero when it is used as the discount rate O NPV O PI IRR (Internal Rate of Return) Pay back rule D Question 2 $1.25 pts O 0 4 9budgeting Flashcards and urses/8977/quizzes/52666/take O NPV O PI O IRR (Internal Rate of Return) O Pay back rule D Question 2 1.25 pts When NPV is greater than O, the PI will be (use the profitability and NPV relations) O less than zero O greater than zero O greater than one less than 1 D Question 3 1.25 pts OIgeting Flashcards and x + ses/8977/quizzes/52666/take Question 3 1.25 pts A firm wants to start a project. A team of financial analysts estimated the following cash flows year cash flow 0 -$100,000 1 55,000 2 43,000 45,000 Suppose that the discount rate (interest rate) is 12%. The NPV is $115,416.59 $10,206.14 $15,416.59 O S-11.627.12budge courses/8977/quizzes/52666/take D Question 4 1.25 pts A firm wants to start a project. A team of financial analysts estimated the following cash flows year cash flow 0 -$100,000 1 55,000 2 43,000 45,000 Suppose that the discount rate (interest rate) is 12%. According to the calculation of NPV we should undertake the project in the short run and do not under take it in the long run not undertake the project we can not decide because we do not have enough information undertake the project OD Question 4 1.25 pts A firm wants to start a project. A team of financial analysts estimated the following cash flows year cash flow 0 -$100,000 1 55,000 N 43,000 45,000 Suppose that the discount rate (interest rate) is 12%. According to the calculation of NPV we should undertake the project in the short run and do not under take it in the long run not undertake the project O we can not decide because we do not have enough information undertake the projectD Question 5 1.25 pts A firm wants to start a project. A team of financial analysts estimated the following cash flows year cash flow 0 $100,000 1 55,000 2 43,000 45,000 The pay back period is 1.04 years O:3.04 years 204 years We cannot find it O/courses/8977/quizzes/52666/take D Question 6 1.25 pts A firm wants to start a project. A team of financial analysts estimated the following cash flows year cash flow 0 -$100,000 55,000 2 43,000 45,000 Based on your calcification of the pay back period and if the cut off point is 2 years. the project should not undertake the project in the short run but undertake the project in the long run Can not decide because we do not have enough information Not undertake the project Undertake the projectD Question 7 1.25 pts A firm wants to start a project. A team of financial analysts estimated the following cash flows year cash flow O -$100,000 1 55,000 2 43,000 45,000 Suppose that the discount rate (interest rate) is 12%. The profitability index (PI) is O 15,416.59 O 0.87 O 1.15 215 Question 8 1.25 nts O 9
