If a project has a net present value equal to zero then I the present value of

If a project has a net present value equal to zero

This preview shows page 4 - 7 out of 85 pages.

15. If a project has a net present value equal to zero, then:I. the present value of the cash inflows exceeds the initial cost of the project.II. the project produces a rate of return that just equals the rate required to accept the project.III. the project is expected to produce only the minimally required cash inflows.IV. any delay in receiving the projected cash inflows will cause the project to have a negative net present value. A. II and III onlyB. II and IV onlyC. I, II, and IV onlyD. II, III, and IV onlyE. I, II, and III only5-4
Chapter 05 - Net Present Value and Other Investment Rules 16. Net present value: 17. Payback is frequently used to analyze independent projects because: 18. The advantages of the payback method of project analysis include the:I. application of a discount rate to each separate cash flow.II. bias towards liquidity.III. ease of use.IV. arbitrary cutoff point. 19. All else equal, the payback period for a project will decrease whenever the: A. initial cost increases.B. required return for a project increases.C. assigned discount rate decreases.D. cash inflows are moved earlier in time. E. duration of a project is lengthened. 5-5
Chapter 05 - Net Present Value and Other Investment Rules 20. The discounted payback period of a project will decrease whenever the:

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture