Cash Outflow $(600,000) Cash inflow 1" year Cash inflow 2"d year Çash inflow 3d year Çash inflow 4" year 150.000 100,000 150.000 200.000 Cash inflow 5" year 120,000

Q: Contribution margin means

A: In the production there are many types of cost some cost change with volume but some do not change…

Q: What happens if the payback period is within the acceptable range?

A: The payback period alludes to what extent it takes for a speculator to hit breakeven to recoup the…

Q: Define the term Risk-free real return?

A: Risk-free real return is a hypothetical number that mirrors the foreseen return on a venture that…

Q: Why would the average rate of return differ from the internal rate of return on the same project

A:

Q: Why is it necessary to determine how long you can expect to reap benefit from the investment?

A: Individuals as well as firms often make investment and specify the time limit for which this…

Q: Explain an example of payback how to calculate.

A: A payback period is the amount of time needed to earn back the cost of an investment. The length of…

Q: Explain the Incremental Cost of Refinancing?

A: Answer: If the interest rate on the higher sum of borrowing is greater, then the average cost of…

Q: Describe the two forms that the calculation of the payback period can take?

A: The payback period alludes to what extent it takes for a speculator to hit breakeven to recoup the…

Q: What does it mean when you have a risk-free guaranteed rate? Give an example as well as the…

A: Theoretically, an investor anticipates a return of no less than the risk-free rate on any investment…

Q: What is the discounted-payback method?

A: Payback period states the number of years that is taken by the project to recover the investment of…

Q: compare Future Value and Present Value?

A: The comparison between present value and future value is as follows:

Q: Consider IRR on Incremental Investment when Initial IRR Flows are equal?

A: Answer: IRR is a measure in capital budgeting used to measure the value of the predicted…

Q: Explain an example how to determine the future value.

A:

Q: Which project has no rate of return?

A: Answer: IRR is a measure in capital budgeting used to measure the value of the predicted…

Q: When does the project reach the payback point?

A: The payback period alludes to what extent it takes for a speculator to hit breakeven to recoup the…

Q: Explain Yield Enhancement?

A: A "yield enhancement technique" is an investment approach that includes purchasing options at the…

Q: What is the criteria to accept a project based on the net present value and the internal rate of…

A: Net present value (NPV) Is the difference between present value of all cash inflows and initial…

Q: What is the decision rule for payback?

A: Payback period is the period of time taken by the project to recover the investment in such project…