Question
-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 | ||
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?
Yes, because the NPV = $30,000 | ||
Yes, because the NPV = $200,000 | ||
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
IRR remains constant while the NPV decreases (explain why this is the correct answer). | ||
IRR increases while the NPV remains constant | ||
IRR decrease while the NPV decreases | ||
IRR remains constant while the NPV increases | ||
IRR decreases while the NPV remains constant |
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