Best Industries is considering an investment project that has the following cash flows: Year 0…………… $ -1,200 Year 1………………. 200 Year 2……………….. 200 Year 3……………….. 800 Year 4………………… 300 The company’s discount rate for such calculations is 10% 1. For Best Industries what is the project’s IRR? a. 10.00% b. 11.92% c. 22.75% d. 8.40% 2. For Best Industries what is the NPV? a. $153 b. $ -46.94 c. $375.44 d. $ -153.06 3. Internal rate of return is also: a. Yield b. Rate of return c. Discount rate that makes the NPV equal to zero d. All of the above
Best Industries is considering an investment project that has the following cash flows: Year 0…………… $ -1,200 Year 1………………. 200 Year 2……………….. 200 Year 3……………….. 800 Year 4………………… 300 The company’s discount rate for such calculations is 10% 1. For Best Industries what is the project’s IRR? a. 10.00% b. 11.92% c. 22.75% d. 8.40% 2. For Best Industries what is the NPV? a. $153 b. $ -46.94 c. $375.44 d. $ -153.06 3. Internal rate of return is also: a. Yield b. Rate of return c. Discount rate that makes the NPV equal to zero d. All of the above
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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Best Industries is considering an investment project that has the following cash flows:
Year 0…………… $ -1,200
Year 1………………. 200
Year 2……………….. 200
Year 3……………….. 800
Year 4………………… 300
The company’s discount rate for such calculations is 10%
1. For Best Industries what is the project’s IRR?
a. 10.00%
b. 11.92%
c. 22.75%
d. 8.40%
2. For Best Industries what is the
a. $153
b. $ -46.94
c. $375.44
d. $ -153.06
3.
a. Yield
b. Rate of return
c. Discount rate that makes the NPV equal to zero
d. All of the above
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