Question
Project A has cash flows of $50,000, $49,400, $27,200, and $24,500 for Years 0 to 3, respectively. Project B has an initial cost of $50,000
Project A has cash flows of $50,000, $49,400, $27,200, and $24,500 for Years 0 to 3, respectively. Project B has an initial cost of $50,000 and an annual cash inflow of $18,500 for four years. These are mutually exclusive projects. What is the crossover rate?
30.89 percent
16.08 percent
30.89 percent
Cannot be computed
16.08 percent
7
71
A project with an initial cost of $51,200 is expected to generate annual cash flows of $16,030 for the next 5 years. What is the project's internal rate of return?
18.50%
18.97%
16.22%
17.07%
15.37%
8
81
A project has cash flows of $161,900, $60,800, $62,300, and $75,000 for Years 0 to 3, respectively. The required rate of return is 13 percent. Based on the internal rate of return of _____ percent for this project, you should _____ the project.
9.67; accept
10.41; reject
11.67; accept
10.41; accept
9.67; reject
9
91
Assume a project has cash flows of $54,300, $18,200, $37,300, and $14,300 for Years 0 to 3, respectively. What is the profitability index given a required return of 12.6 percent?
.946
.98
1.02
1.06
1.00
10
101
A project has an initial cost of $95,200, a life of 9 years, and equal annual cash inflows. The required return is 8.5 percent. According to the profitability index decision rule, what is the minimum annual cash flow necessary to accept the project?
$16,972.30
$10,577.78
$18,386.65
$15,557.94
$14,361.17
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