# Assignment 3 the initial cost of the project can be

• 24

Course Hero uses AI to attempt to automatically extract content from documents to surface to you and others so you can study better, e.g., in search results, to enrich docs, and more. This preview shows page 12 - 15 out of 24 pages.

Assignment 3the initial cost of the project can be reduced.the total amount of the cash inflows is reduced.each cash inflow is moved such that it occurs one year later thanoriginally projected.Question 232.5 out of 2.5 pointsThe profitability index:SelectedAnswer:is useful as a decision tool when investment funds are limited andall available funds are allocated.Answers:rule often results in decisions that conflict with the decisions basedon the net present value rule.is useful as a decision tool when investment funds are limited andall available funds are allocated.produces results which typically are difficult to comprehend.rule adjusts for a project's size when determining which one of twoprojects to accept.method is most commonly used when deciding between mutuallyexclusive projects of varying size.
Question 242.5 out of 2.5 pointsWhat is the net present value of a project with an initial cost of \$36,900 andcash inflows of \$13,400, \$21,600, and \$10,000 for Years 1 to 3, respectively?
Assignment 3\$797.22−\$1,350.49−\$1,195.12ResponseFeedback:NPV = −\$36,900 + \$13,400 / 1.13 + \$21,600 / 1.132+ \$10,000 /1.133= −\$1,195.12Question 252.5 out of 2.5 pointsWhich one of these statements related to beta is correct?
Question 262.5 out of 2.5 pointsAdams Inc. has the following data: rRF= 5.00%; RPM= 6.00%; and b = 1.05. What is the firm'scost of common from reinvested earnings based on the CAPM?Answers:
Assignment 3d.11.30%e.11.99%ResponseFeedback:Rationale:rRF5.00%RPM6.00%b1.05rs= rRF+ (RPM×b)11.30%

Course Hero member to access this document

Course Hero member to access this document

End of preview. Want to read all 24 pages?

Course Hero member to access this document

Term
Spring
Professor
JamesL.Slaydon
Tags