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-If the Cost of Goods decreases and all other factors remain the same then: NPV will remain the same Not enough information NPV will increase

-If the Cost of Goods decreases and all other factors remain the same then:

NPV will remain the same

Not enough information

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NPV will increase (Explain why this is the correct answer)

NPV will decrease

-Milson Company is considering the purchase of ABC Company at a price of $190,000. If Milson makes the acquisition, its after tax cash flows will increase by $30,000 per year and remain at this new level forever. If the company MARR is 15%, should Milson buy ABC Company?

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Yes, because the NPV = $30,000

Yes, because the NPV = $200,000

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Yes, because the NPV = $10,000 (explain why this is the correct answer)

No, because NPV

There is not enough information given to answer this question

-Consider a project with an initial outflow at time 0 and positive cash flows in all subsequent years. As the discount rate (MARR) is increased then

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IRR remains constant while the NPV decreases (explain why this is the correct answer).

IRR increases while the NPV remains constant

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IRR decrease while the NPV decreases

IRR remains constant while the NPV increases

IRR decreases while the NPV remains constant

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