Don't use ai. If the Net Present Value (NPV) of a project is positive, it means:A. The project will break evenB. The project is not financially viableC. The project is expected to add value to the firmD. The payback period is very shorthelp me
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Don't use ai.
If the Net Present Value (NPV) of a project is positive, it means:
A. The project will break even
B. The project is not financially viable
C. The project is expected to add value to the firm
D. The payback period is very short
help me
Step by step
Solved in 2 steps
- Which of the following statements is true? Multiple Cholce There Is no correlation between net present value and Internal rate of return. A project with a positive net present value will have a discount rate that Is greater than the Internal rate of return. None of the statements are true Glven several projects with positive net present values, the company should choose the project with the hlghest net present value. A project with a positive net present value will have a discount rate that Is less than the Internal rate of return.If the net present value (NPV) of a project is negative: Group of answer choices accepting the project will decrease the value of the firm. the project is acceptable. the project's discounted payback period is shorter than the useful life of the project. the internal rate of return is high than the firm's required rate of return.A project has a discounted payback period that is equal to the required payback period. Given this information, the project: Multiple Choice will still be acceptable if the discount rate is increased. must have a zero net present value. must have a profitability index that is equal to or greater than 1.0. must have an internal rate of return equal to the required return. will not be acceptable under the payback rule.
- What should a manager do with a project that has two internal rates of return (IRRs)? O a. Do the project if the higher of the two IRRs exceeds the cost of capital. O b. Do the project if the lower of the two IRRS exceeds the cost of capital. Oc. Choose the IRR that looks the most reasonable, and do the project if this chosen IRR is greater than the cost of capital. Od. Abandon the project, as it involves unconventional cash flows. O e. Do the project if the net present value of the project is greater than zero.In a few sentences, answer the following question as completely as you can. According to your textbook, “an investment should be accepted if the net present value is positive and rejected if it is negative” (p. 239). What does an NPV of zero mean?If you were a financial decision maker facing a project with NPV of zero (or close to zero) what would you do? Can you think of any other factors that might influence your decision?Making the accept or reject decision Hungry Whale Electronics's decision to accept or reject project Alpha is independent of its decisions on other projects. If the firm follows the NPV method, it should project Alpha. Which of the following statements best explains what it means when a project has an NPV of $0? O When a project has an NPV of $0, the project is earning a rate of return less than the project's weighted average cost of capital. It's OK to accept the project, as long as the project's profit is positive. O When a project has an NPV of $0, the project is earning a rate of return equal to the project's weighted average cost of capital. It's OK to accept a project with an NPV of $0, because the project is earning the required minimum rate of return. O When a project has an NPV of $0, the project is earning a profit of $0. A firm should reject any project with an NPV of $0, because the project is not profitable.
- The firm should accept a project if: the profitability index is greater than or equal to 1. the payback period is less than the life of the investment. the internal rate of return is positive. the internal rate of return is greater than the accounting rate of return.Suppose Hungry Whale Electronics is evaluating a proposed capital budgeting project (project Alpha) that will require an initial investment of $400,000. The project is expected to generate the following net cash flows: Year Cash Flow Year 1 $325,000 Year 2 $475,000 Year 3 $475,000 Year 4 $450,000 Hungry Whale Electronics's weighted average cost of capital is 9%, and project Alpha has the same risk as the firm's average project. Based on the cash flows, what is project Alpha's net present value (NPV)? $1,131,073 $983,542 $1,458,542 $1,433,542Please need help with this financial accounting question not use ai
- Which of the following statements is CORRECT? a. The NPV profile graph for a normal project will generally have a positive (upward) slope as the life of the project increases. b. An NPV profile graph shows how a project's payback varies as the cost of capital changes. O c. An NPV profile graph is designed to give decision makers an idea about how a project's contribution to the firm's value varies with the cost of capital. d. An NPV profile graph is designed to give decision makers an idea about how a project's risk varies with its life. e. We cannot draw a project's NPV profile unless we know the appropriate WACC for use in evaluating the project's NPV.12. Which of the following statements is CORRECT? Group of answer choices To find the MIRR, we discount the TV at the IRR. The discounted payback method eliminates all of the problems associated with the payback method. The IRR method appeals to some managers because it gives an estimate of the rate of return on projects rather than a dollar amount, which the NPV method provides. A project's NPV profile must intersect the X-axis at the project's WACC. When evaluating independent projects, the NPV and IRR methods often yield conflicting results regarding a project's acceptability.Which of the following statements is most FALSE? A. If a project with normal cash flows has a positive NPV, it will definitely have an MIRR greater than the cost of capital. B. If a project with normal cash flows has an IRR that is greater than the cost of capital, then taking on that project would decrease the value of the firm. C. If a project has normal cash flows, then the MIRR has to be between k and IRR if the project has positive interim cash flows (cash flows between t=0 and the end of the project). D. If a project with normal cash flows does not have any interim cash flows, the project's IRR will equal the project's MIRR. E. Multiple IRRS can exist for a project if the project has nonnormal cash flows. OA OB OC