QUESTION 1 Your venture has signed a new consulting contract that will require you to invest in new analytical software and a new computer. The contract will generate the following periodic cash ows. You have used bank credit to finance the cost of the software and hardware. The financing rate is 6%. Cash ows generated from the project will be reinvested at 8%. The MIRR of the project is between 6% and 7%. time cash flow 0 -$200,000 1 $20,000 2 $30,000 3 $50,000 4 $65,000 5 $80,000 True False QUESTION 2 Your venture has signed a new consulting contract that will require you to invest in new analytical software and a new computer. The contract will generate the cash flows at specific times. Your cost of capital is 12%. In the XNPV function you can include the initial time and initial cash ow in the Excel formula so no need to net it out as in the NPV formula. This project adds value to your company. dates cash flows 12/10/2022 -$12,000.00 4/10/2023 $4,000.00 8/10/2023 $4,000.00 12/10/2023 $4,000.00 4/10/2024 $4,000.00 True False QUESTION 3 Your venture has signed a new consulting contract that will require you to invest in new analytical software and a new computer. The cost of this equipment is $200,000. You will nance this investment by borrowing from the bank. You want to make your periodic payments as low as possible. You have to offers from banks. Either The loan will be for 3 years at a rate of 9%.The loan will be amortized over the three years so that at the end of year 3 your loan balance will be $0 or The loan will be for six years at a rate of 10% an again the loan will be fully amortized over the six year period. The loan with the lowest payment is 6 years at 10%. True False QUESTION 4 Your venture has signed a new consulting contract that will require you to invest in new analytical software and a new computer. The contract will generate the cash flows at specic times. You decision rule is to only accept projects that have an internal rate of return that exceeds 12%. dates cash flows 12/10/2022 -$12,000.00 4/10/2026 $4,000.00 8/10/2029 $4,000.00 12/10/2030 $4,000.00 4/10/2031 $4,000.00 This project should be accepted True False QUESTION 5 Delays in the receipt of ash ows will diminish a projects internal rate of return. True False QUESTION 6 Your venture has signed a new consulting contract that will require you to invest in new analytical software and a new computer. The contract will generate the following periodic cash flows. You have used bank credit to finance the cost of the software and hardware. The financing rate is 6%. Cash flows generated from the project will be reinvested at 2%. The MIRR of the project is between 4.5% and 4.75%. time cash flow 0-$200,000 1 $20,000 $30,000 c N $50,000 4 $65,000 5 $80,000 True O False QUESTION 7 dates cash flows 12/10/2022 -$12,000.00 4/10/2023 $4,000.00 8/10/2023 $4,000.00 12/10/2023 $4,000.00 4/10/2024 $4,000.00 Your venture has signed a new consulting contract that will require you to invest in new analytical software and a new computer. The contract will generate the cash flows at specific times. You decision rule is to only accept projects that have an internal rate of return that exceeds 40%. This project should be accepted. True FalseQUESTION 8 Your venture has signed a new consulting contract that will require you to invest in new analytical software and a new computer. The cost of this equipment is $200,000. You will nance this investment by borrowing from the bank. The loan will be for 3 years at a rate of 9%.The loan will be amortized over the three years so that at the end of year 3 your loan balance will be $0. Your periodic loan payment will be between $81,000 and $81,200. True False QUESTION 9 Your venture has signed a new consulting contract that will require you to invest in new analytical software and a new computer. The cost of this equipment is $200,000. You will nance this investment by borrowing from the bank. The loan will be for 6 years at a rate of 7%.The loan will be amortized over the three years so that at the end of year 3 your loan balance will be $0. The interest you owe at the end of year 3 will be $9,948.72 plus or minus ve dollars. True False QUESTION 10 Your venture has signed a new consulting contract that will require you to invest in new analytical software and a new computer. The cost of this equipment is $200,000. You will nance this investment by borrowing from the bank. The loan will be for 6 years at a rate of 7%.The loan will be amortized over the three years so that at the end of year 3 your loan balance will be $0. The principal payment at the end of year 3 is $32,010.44 plus or minus $5. True False QUESTION 11 Your venture has signed a new consulting contract that will require you to invest in new analytical software and a new computer. The cost of this equipment is $200,000. You will nance this investment by borrowing from the bank. The loan will be for 6 years at a rate of 7%.The loan will be amortized over the three years so that at the end of year 3 your loan balance will be $0. Your principal payment will be higher in year 2 than in year 3. True False QUESTION 12 Your venture has signed a new consulting contract that will require you to invest in new analytical software and a new computer. The contract will generate the cash flows at specific times. Your cost of capital is 12%. The XNPV of this project is between $2,500 and $2,600. In the XNPV function you can include the initial time and initial cash ow in the Excel formula so no need to net it out as in the NPV formula. dates cash flows 12/10/2022 -$12,000.00 4/1 0/2023 $4,000.00 8/1 0/2023 $4,000.00 1 2/1 0/2023 $4,000.00 4/1 0/2024 $4,000.00 0 sh flows (NPV is period bar > www.AuditExcel.co.za True False QUESTION 13 Your venture has signed a new consulting contract that will require you to invest in new analytical software and a new computer. The cost of this equipment is $200,000. You will nance this investment by borrowing from the bank. The loan will be for 3 years at a rate of 7%.The loan will be amortized over the three years so that at the end of year 3 your loan balance will be $0. Your periodic loan payment will be between $76,200 and $76,211. True False QUESTION 14 principal time returns $200,000 0 1 5.3500% 2 5.7000% 3 6.0500% 4 6.4000% 5 6.7500% 6 7.1000% 7 7.4500% 8 7.8000% 9 8.1500% 10 8.5000% You have $200,000 today. There is a project that you believe will return increasing returns over the next ten years. In fact you have come up with the return schedule that you believe is the best forecast of rates of return on your investment. Based on these returns the FV of your $200,000 investment at the end of 10 years will be between $390,500 and $390, 510. You make the investment at time zero and rst interest is earned over the st year so it is earned from time 0 to time 1. The FVSCHEDULE starts at time 1 not time 0. True False QUESTION 15 Your venture has signed a new consulting contract that will require you to invest in new analytical software and a new computer. The contract will generate the cash flows at specific times. Your cost of capital is 18%. In the XNPV function you can include the initial time and initial cash ow in the Excel formula so no need to net it out as in the NPV formula. dates cash flows 12/10/2022 -$12,000.00 4/10/2023 $4,000.00 8/10/2023 $4,000.00 12/10/2023 $4,000.00 4/10/2024 $4,000.00 This project does not create monetary value. True False QUESTION 16 Your venture has signed a new consulting contract that will require you to invest in new analytical software and a new computer. The contract will generate the following periodic cash ows. You have used bank credit to finance the cost of the software and hardware. The nancing rate is 6%. Cash ows generated from the project will be reinvested at 4%. The MIRR of the project is between 6% and 7%. time cash ow 0 -$200,000 $20,000 $30,000 $50,000 $65,000 $80,000 mhwmd True False