An advantage of the net present value method over the internal rate of return model in discounted cash flow analysis is that the net present value method  Group of answer choices  Uses discounted cash flows whereas the internal rate of return model does not  Computes a desired rate of return for capital projects  Can be used when there is no constant rate of return required for each year of the project  Uses a discount rate that equates the discounted cash inflows with the outflows

Q: Relevant cash inflows and outflows in a discounted cash flow analysis are the differences in…

A: True

Q: A project's IRR: A) All of these answers are correct. B is the average rate of return necessary to…

A: IRR is the rate that would result in net present value of future cash flows equal to exactly Zero.

Q: which of the following statement is true>? 1. return on equity is the ratio of total assets to…

A: Capital budgeting is a way to evaluate profitability of new projects or investment by using various…

Q: ternal rate of return (IRR) and net presetn value (NPV):  -Generally arrive at the same…

A: Net present value is basic technique used in capital budgeting as it considers the time value of…

Q: Sophisticated capital budgeting techniques do not A. examine the size of the initial outlay. B.…

A: Capital budgeting techniques are used to understand the feasibility/acceptability of long term…

Q: 4. Modified internal rate of return (MIRR) The IRR evaluation method assumes that cash flows from…

A: The objective of the question is to calculate the Modified Internal Rate of Return (MIRR) for a…

Q: Describe how NPV is calculated and describe the information this measure provides about a sequence…

A: NPV net present value is very important factor in deciding the feasibility analysis of projects. It…

Q: ve determined the profitability of a planned project by finding the present value of all the cash…

A: Present value of cash flow is related to the discount rate and the period of cash flow of the…

Q: Explain how inflation impacts capital budgeting analysis.  Why do we care? How is NPV impacted if…

A: Nominal rate and inflation rate are related to each other through real rate as shown below. Nominal…

Q: A rate of return is... O A. the return which is required for an investment O B. the current worth of…

A: Solution:- Rate of return means the rate at which the investor wants the return.

Q: 1. Which of the following is not true? Group of answer choices The method in which we calculate a…

A: Capital Budgeting techniques and methods are used to measure and evaluate the potentiality of…

Q: . If a capital budgeting project’s cash flows are not normal, the internal rate of return (IRR)…

A: SOLUTION- INTERNAL RATE OF RETURN- IT IS A DISCOUNT RATE THAT MAKES THE NET PRESENT VALUE OF ALL…

Q: Discounting an investment’s cash flows using the internal rate of return will result in which of the…

A: Introduction: The internal rate of return (IRR) is a research and consulting metric used to assess…

Q: The internal rate of return method assumes that a project's cash flows are reinvested at the:

A: The internal rate of return is a financial analysis tool that is used to estimate the profitability…

Q: Which of the following statements is CORRECT? Assume that the project being considered has normal…

A: Internal rate of return (IRR) is the discount rate of a project which makes its NPV=0. It is a…

Q: All of the followings are True when the net present value method is used to choose between two…

A: Net present value is the excess of present value of cash flows over cash outflows or initial…

Q: If the project’s weighted average cost of capital (WACC) is 7%, what is its NPV? a.)$340,887…

A: Payback period (PBP) refers to the period or duration within which the company is able to recover…

Q: Question 1   Which one of the following statements is NOT correct?     Group of answer choices   If…

A: Capital budgeting is a technique to estimate the profitability of the projects. There are various…

Q: in Course: 2024SP-ACC-121-NT1 Prin of Managerial Accounting | Wilson Commu... C CengageNOWv2 |…

A: The activity-based costing (ABC) method assigns overhead and indirect expenses to connected products…

Q: t? A If internal rate of return (IRR) is greater than the cost of capital then reject B If IRR is…

A: Introduction : In simple words, discounted cash flow analysis refers to the valuation technique…

Q: When evaluating projects using internal rate of return,?  A. projects having lower early-year cash…

A: Internal rate of return is the rate of return at which the net present value is equal to zero.…

Q: return

A: MIRR or the modified internal rate of return assumes that the company's cash flows can be reinvested…

Q: fe of the project. Which one of the following statements is correct with respect to this…

A: NPV Method assumes that all the cash flows are reinvested at the company's Cost of Capital. IRR…

Q: Select the Incorrect statement concerning the present value index (PVI). Multiple Choice The PVI is…

A: Present value index or profitability index :-  It is ratio of total present value of cash inflows to…

Q: The Modified IRR method is   a. Exactly the same as the IRR.   b. A better measure than the NPV.…

A: IRR is the rate at which NPV of the project is zero

Q: The IRR evaluation method assumes that cash flows from the project are reinvested at the same rate…

A: MIRR refers to modified internal rate of return. MIRR, as a capital budgeting tool, seeks to remove…

Q: A project's present value can be decreased by, I. decreasing the required discount rate (required…

A: There are various reasons for decreasing the present value of the project some of them are as…

Q: Which of the following is a disadvantage of the IRR project evaluation method? Question 5Select…

A: IRR is also known as Internal Rate of Return.. It is a capital budgeting technique which helps in…

Q: The net present value is ... O A. The return which is required for an investment OB. The current…

A: Capital budgeting The process that takes decisions related to investing for the long term is known…

Q: In computing the present value of an investment in equipment, the present value of the residual…

A: Net Present value = Present value of future cash flows + Present value of terminal cash flow -…

Q: Which of the following statements is CORRECT? Assume that the project being considered has normal…

A: IRR stands for Internal Rate of Return, which is a financial metric used to evaluate the…

Q: Problem 8-18 Crossover Point [LO 3] Crenshaw Enterprises has gathered projected cash flows for two…

A: Internal rate of return is the discount rate at which the present value of the future cash flow and…

Q: Of the capital budgeting techniques discussed, which works equally well with normal and non-normal…

A: The correct answer is “Net present value”.

Q: When the present value of the cash inflows exceeds the initial cost of a project, then the project…

A: If present value of cash inflows exceeds the initial cost of a project, then NPV of the project will…

Q: Which capital budgeting technique defines returns in terms of income instead of cash flows? 4 a) The…

A: Payback Period, IRR and Net Present Value is calculated using annual net cash inflows. And…

Q: The IRR evaluation method assumes that cash flows from the project are reinvested at the same rate…

A: Modified internal rate of return (MIRR) is the upgraded version of the internal rate of return,…

Q: The internal rate of return is the: discount rate that makes present value of cash inflows equal to…

A: The internal rate of return (IRR) is a capital budgeting metric used to gauge the benefit of…

Q: The payback period is a non - discounted cash flow technique that measures: a. The time required to…

A: The payback period is a financial metric used to evaluate the time it takes for an investment to…

Q: An analysis of a proposal by the net present value method indicates that the present value of future…

A: The objective of the question is to understand the implications of a negative net present value…

Q: Mathematically, we can determine the rate of return for a given project’s cash flow series by…

A: When Cash Flows are discounted by using Internal Rate of Return for a period of cash flows held.…

Q: Which of the following statements is CORRECT? Assume that the project being considered has normal…

A: Internal Rate-of-Return is discount rate that makes NPV(Net Present Value) zero for an investment…

Q: An advantage of the internal rate of return method is that a.it considers the time value of money.…

A: Capital budgeting is the process of selecting and choosing best alternatives among the available…

Q: The IRR evaluation method assumes that cash flows from the project are reinvested at the same rate…

A: The MIRR is computed using the MIRR function in Excel as follows.MIRR= 23.24%Accept the project…

Q: What capital budgeting rule is a simple but imperfect attempt to solve the capital rationing…

A: Answer: Option c.  Payback rule   Explanation: Payback rule is a very simple method which is used to…

Q: QUESTION #1: Which of the following is a disadvantage of using the IRR method of capital budgeting…

A: IRR stands for Internal Rate of Return. IRR is a financial measurement used to evaluate…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.