fin hw 11 - B - Projects C and D are normal and mutually...

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Sheet1 Page 1 A - When should a project be accepted according to net present value (NPV)? a. NPV > 0 b. NPV < 0 c. Only if the NPV = 0 d. None of the above D - What is a project's internal rate of return? a. The project's required rate of return. b. The increase in the company's wealth or value if the project is accepted. c. The cost of the project d. The project's expected return. A - What is the crossover rate? a. The rate where two normal projects have the same net present value. b. A project's expected return. c. A project's required return. d. The difference between two normal project's internal rates of return.
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Unformatted text preview: B - Projects C and D are normal and mutually exclusive with the same WACC. Project C has a NPV of $10,000 and an IRR of 21 % a. Project C b. Project D c. Both projects C and D d. Neither project should be selected. c - When should a normal project be accepted according to the modified internal rate of return (MIRR)? a. MIRR < WACC b. Only if MIRR = WACC c. MIRR > WACC d. MIRR > IRR. D - What does the payback period ignore? a. The time value of money b. Cash flows beyond the payback period c. The cost of the project. d. Both a and b....
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This note was uploaded on 05/05/2010 for the course ECONMOICS ECON 203 taught by Professor Josephpetry during the Spring '10 term at University of Illinois, Urbana Champaign.

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