3. Which of the following projects should you turn down?
The project IRR is 14% and your requirement is that projects
meet a 9% threshold.
The initial investment is $10mm and it produces 4 years of cash
flows of $3mm per year. Your cost of capital is 9%.
The IRR is only 3%, but it has a positive NPV.
The project has a positive NPV of only $1
9. Assume Elon Musk wants to consider building a new
motorcycle factory and is deciding between California, Mexico, and
Texas. We would refer to these project options as:
operating
dependent
independent
extraordinary
mutually exclusive
10. When evaluating a project, the best metrics to use
are:
NPV and payback period
FASB and PI
SVA and NRR
Independent and exclusive
NPV and IRR
11. A capital expenditure is:
an expenditure that is greater than 5% of revenue.
any significant expenditure by a company.
an outlay of funds for a project that produces benefits that
last for greater than one year.
equal to property plant and equipment.
3. Which of the following projects should you turn down? The project IRR is 14% and your requirement is that projects me
-
- Site Admin
- Posts: 899603
- Joined: Mon Aug 02, 2021 8:13 am