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Study Guide 4 - ViewAttempt1of1 Title Started Submitted...

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View Attempt 1 of 1 Title: Study Guide 4 Started: July 18, 2011 11:09 AM Submitted: July 28, 2011 4:38 PM Time spent: 245:29:25 Total score: 76/126 = 60.3175% Total score adjusted by 0.0 Maximum possible score: 126 1. Quattro Inc. has th Quattro, Inc. has the following mutually exclusive projects avai historically used a 4-year cutoff for projects. The required retur The payback for Project A is ____ while the payback for Projec for Project A is _____ while the NPV for Project B is _____. W should the company accept? Student Response A. 3.92 years; 3.64 years; $780.85; $1,211.48; accept both B. 3.92 years; 3.79 years; -$211.60; $1,211.48; accept Proj C. 3.92 years; 3.79 years; $780.85; -$7,945.93; accept Pr D. 4.06 years; 3.64 years; $780.85; $1,211.48; accept both E. 4.06 years; 3.79 years; -$211.60; -$7,945.93; reject both Score: 0/2 2. Consider the followi Consider the following two mutually exclusive projects: Whichever project you choose, if any, you require a 14 percent investment. If you apply the payback criterion, you will choose you apply the NPV criterion, you will choose investment _____ criterion, you will choose investment ____; if you choose the pr criterion, you will choose investment ____. Based on your first project will you finally choose? Student Response A. A; B; A; A; B B. A; A; B; B; A
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Student Response C. A; A; B; B; B D. B; A; B; A; A E. B; A; B; B; A Score: 0/2 3. What is the IRR of t What is the IRR of the following set of cash flows? Student Response Score: 2/2 4. The net present value of a The net present value of a project's cash inflows is $8,216 at a 1 The profitability index is 1.03 and the firm's tax rate is 34 perce cost of the project? Student Response
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Score: 0/2 5. T.L.C., Inc. is cons T.L.C., Inc. is considering an investment with an initial cost of depreciated straight line to a zero book value over the life of the inflows generated by the project are estimated at $76,000 for th $30,000 for the following two years. What is the internal rate of Student Response Score: 2/2 6. Today Crunchy Snack Today, Crunchy Snacks is investing $487,000 in a new oven. A expects its cash flows to increase by $62,000 a year for the next $98,000 a year for the following three years. How long must the recovers all of its initial investment? Student Response A. 3.97 years B. 4.18 years C. 4.46 years D. 4.70 years E. The project never pays back. Score: 2/2
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7. Kyle Electric has th Kyle Electric has three positive net present value opportunities has not been able to find financing for any of these projects. Wh following terms best describes the firm's situation? Student Response Score: 2/2 8. Valley Forge and Met Valley Forge and Metal purchased a truck five years ago for loc one of the following costs related to this truck is the best examp Assume the truck has a usable life of eight years.
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