the cash flows below?
- How Many Of Internal Rate Of Returns Irrs Do You Expect From The Cash Flows Below 5 3 4 2 Which Of The Following Is N 1 (3.19 KiB) Viewed 33 times
3
4
2
Which of the following is NOT a limitation of the payback
rule?
It does not consider the time value of money.
Lacks a decision criterion that is economically based.
It is difficult to calculate.
It does not consider cash flows occurring after the payback
period.
You are considering the following project. Your cost of
capital is 11.9%. The cash flows for this project are shown
as below ($ million). What is the IRR of this
Project A?
18.2%
11.2%
14.2%
16.7%
Your portfolio consists of 40 shares of CSH and 40 shares of
EJH, which you just bought at $10 and $20 per share, respectively.
What fraction of your portfolio is invested in CSH? In EJH?
30%, 70%
33%, 67%
73%, 27%
29%, 71%
Below is your estimated cash flows from the proposed acquisition
of a new milling machine,
At t = 0, Net cash flow = − $500,000
Operating cash
flows:
OCF1 = $100,000
OCF2 = $120,000
OCF3 = $140,000
OCF4 = $160,000
OCF5 = $160,000
At the end of the project (t = 5), ternimal cash flow
= $30,500 after taking into account all
CFs (e.g., change in NWC, salvage value, taxes, etc.)
If your cost of capital is 9%, Should the
machine be purchased based on cash flows you estimate above?
Yes. Because NPV is $18,010.
Yes. Because NPV is $38,010.
Yes. Because NPV is $28,010.
Yes. Because NPV is $48,010.
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