*Time & Cash Flows are tables by the way I can't get them to form correctly*

Q#1

Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown below. The required rate of return on projects of both of their risk class is 12 percent, and that the maximum allowable payback and discounted payback statistic for the projects are 2 and 3 years, respectively.

Time:

0

1

2

3

Project A Cash Flow

-29,000

19,000

39,000

10,000

Project B Cash Flow

-39,000

19,000

29,000

59,000

Use the NPV decision rule to evaluate these projects; which one(s) should it be accepted or rejected?

A.Accept both A & B

B.Accept neither A nor B

C.Accept A, reject B

D.Reject A, accept B

Q#2

Compute the payback statistic for Project A if the appropriate cost of capital is 9 percent and the maximum allowable payback period is four years. (Round your answer to 2 decimal places.)

Project A

Time:

0

1

2

3

4

5

Cash Flow:

-$1,800

$670

$720

$680

$460

$260

Payback =_____ yrs

Should the project be accepted or rejected?

A.Accepted

B.Rejected

Q#3

Compute the PI statistic for Project Q if the appropriate cost of capital is 12 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.)

Project Q

Time:

0

1

2

3

4

Cash Flow:

-$11,300

$3,500

$4,330

$1,670

$2,300

PI= _____

Should the project be accepted or rejected?

A.Accepted

B.Rejected

Q#4

Compute the NPV statistic for Project Y if the appropriate cost of capital is 11 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places.)

Project Y

Time:

0

1

2

3

4

Cash Flow:

-$8,200

$3,670

$4,500

$1,840

$620

NPV = _____

Should the project be accepted or rejected?

A.Accepted

B.Rejected

Q#5

Compute the PI statistic for Project Z if the appropriate cost of capital is 6 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.)

Project Z

Time:

0

1

2

3

4

5

Cash Flow:

-$2,500

$650

$780

$950

$600

$400

PI = _______

Should the project be accepted or rejected?

A.Accepted

B.Rejected

Q #6

Compute the IRR static for Project E. The appropriate cost of capital is 9 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.)

Project E

Time:

0

1

2

3

4

5

Cash Flow:

-$3,300

$1,030

$990

$860

$640

$440

IRR = ______%

Should the project be accepted or rejected?

A.Accepted

B.Rejected

Q#7

Which of these describe groups or pairs of projects where you can accept one but not all?

A.Mutually Dependent

B.Mutually Exclusive

C.Dependent

D.Independent

Q#8

Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown below. The required rate of return on projects of both of their risk class is 11 percent, and that the maximum allowable payback and discounted payback statistic for the projects are 2 and 3 years, respectively.

Time:

0

1

2

3

Project A Cash Flow

-33,000

23,000

43,000

14,000

Project B Cash Flow

-43,000

23,000

33,000

63,000

Use the PI decision rule to evaluate these projects; accept the project with the higher PI value.

A.Accept A, reject B

B.Reject A, accept B

C.Accept both A and B

D.Accept neither A nor B

Q#9

Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 9 percent, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years, respectively.

Time:

0

1

2

3

4

5

6

Cash Flow:

-$5,200

$1,250

$2,450

$1,650

$1,570

$1,450

$1,250

Use the payback decision rule to evaluate this project. (Round your answer to 2 decimal places.)

Payback= ______ yrs

Should the project be accepted or rejected?

A.Accepted

B.Rejected

Q#10

Compute the IRR for Project F. The appropriate cost of capital is 12 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.)

Project F

Time:

0

1

2

3

4

Cash Flow:

-$10,300

$3,950

$4,780

$2,210

$2,750

IRR = _____%

Should the project be accepted or rejected?

A.Accepted

B.Rejected

Q#11

Compute the NPV statistic for Project U if the appropriate cost of capital is 10 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places.)

Project U

Time:

0

1

2

3

4

5

Cash Flow:

-$1,300

$470

$1,780

-$580

$420

-$160

NPV= _____

Should the project be accepted or rejected?

A.Accepted

B.Rejected

Q#12

Which of these are sets of cash flows where all the initial cash flows are negative and all the subsequent ones are either zero or positive?

A.Normal Cash Flows

B.Non-Normal Cash Flows

C.Timeline Cash Flows

D.Expected Cash Flows

Q#13

We accept projects with a positive NPV because it means that:

A.We have recovered all our costs.

B.We are creating wealth for shareholders.

C.The project's expected return exceeds the cost of capital.

D.All of the options.

Q#14

Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 12 percent, and that the maximum allowable payback and discounted payback statistics for your company are 2.5 and 3.0 years, respectively.

Time:

0

1

2

3

4

5

Cash Flow:

-$361,000

$65,200

$83,400

$140,400

$121,400

$80,600

Use the NPV decision rule to evaluate this project. (Do not round intermediate calculations and round your final answer to 2 decimal places.)

NPV = ____

Should the project be accepted or rejected?

A.Accepted

B.Rejected

Q#15

Of the capital budgeting techniques discussed, which works equally well with normal and non-normal cash flows and with independent and mutually exclusive projects?

A.Net Present Value

B.Payback Period

C.Modified Internal Rate of Return

D.Discounted Payback Period

Q#16

Compute the NPV for Project M if the appropriate cost of capital is 7 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places.)

Project M

Time:

0

1

2

3

4

5

Cash Flows:

-$3,400

$730

$860

$900

$980

$480

NPV= _____

Should the project be accepted or rejected?

A.Accepted

B.Rejected

Q #17

Compute the NPV statistic for Project X given the following cash flows if the appropriate cost of capital is 10 percent.

Project X

Time:

0

1

2

3

4

Cash Flow:

-$100,000

-$36,000

$200,000

$210,000

-$10,000

A.$248,962.50

B.$183,507.96

C.$247,410.67

D.$262,622.77