All projects (A to G) are 7-year projects. NPV = Net present value. IRR = internal rate of return. MIRR = modified internal rate of return. Pl = profitability index. Criteria: Project A Project B Project C Project D Project_E Project_I NPV= $137,083 $31,290 $6,016 $7,647 ($584) $12, IRR= 31.80% 48.34% 12.03% 11.30% 9.94% 26.7 MIRR= 18.52% 23.52% 10.62% 10.59% 9.97% 23.5 Pl= 1.69 2.25 1.040 1.038 0.999 The discounting rate (r) is 10%. Which of the following 10 statements are false/incorrect (there are several, select all that apply). Consider each statement on its own separate from the others listed: If all projects are independent, under the Pl rule, all projects should be taken If all projects are mutually exclusive, under the NPV rule only project A should be taken If only projects E and F are mutually exclusive, under the NPV rule only project A should be taken If all projects are mutually exclusive, under the NPV rule projects A, B, C, D, F and G should be taken If all projects are independent, under the NPV rule, projects A, B, C, D, F, and G should be taken If all projects are mutually exclusive, under the IRR rule only project B should be taken
All projects (A to G) are 7-year projects. NPV = Net present value. IRR = internal rate of return. MIRR = modified internal rate of return. Pl = profitability index. Criteria: Project A Project B Project C Project D Project_E Project_I NPV= $137,083 $31,290 $6,016 $7,647 ($584) $12, IRR= 31.80% 48.34% 12.03% 11.30% 9.94% 26.7 MIRR= 18.52% 23.52% 10.62% 10.59% 9.97% 23.5 Pl= 1.69 2.25 1.040 1.038 0.999 The discounting rate (r) is 10%. Which of the following 10 statements are false/incorrect (there are several, select all that apply). Consider each statement on its own separate from the others listed: If all projects are independent, under the Pl rule, all projects should be taken If all projects are mutually exclusive, under the NPV rule only project A should be taken If only projects E and F are mutually exclusive, under the NPV rule only project A should be taken If all projects are mutually exclusive, under the NPV rule projects A, B, C, D, F and G should be taken If all projects are independent, under the NPV rule, projects A, B, C, D, F, and G should be taken If all projects are mutually exclusive, under the IRR rule only project B should be taken
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Please correct answer and don't used hand raiting
Transcribed Image Text:All projects (A to G) are 7-year projects. NPV = Net present value. IRR = internal rate
of return. MIRR = modified internal rate of return. Pl = profitability index.
Criteria:
Project A Project B
Project C Project D Project_E
Project_I
NPV=
$137,083
$31,290
$6,016 $7,647
($584)
$12,
IRR=
31.80%
48.34%
12.03%
11.30%
9.94%
26.7
MIRR=
18.52%
23.52%
10.62%
10.59%
9.97%
23.5
Pl=
1.69
2.25
1.040
1.038
0.999
The discounting rate (r) is 10%.
Which of the following 10 statements are false/incorrect (there are several, select
all that apply). Consider each statement on its own separate from the others listed:
If all projects are independent, under the Pl rule, all projects should be taken
If all projects are mutually exclusive, under the NPV rule only project A should
be taken
If only projects E and F are mutually exclusive, under the NPV rule only project A
should be taken
If all projects are mutually exclusive, under the NPV rule projects A, B, C, D, F
and G should be taken
If all projects are independent, under the NPV rule, projects A, B, C, D, F, and G
should be taken
If all projects are mutually exclusive, under the IRR rule only project B should
be taken
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