Five alternatives are being evaluated by the incrementalrate of return method.IncrementalRate of Return, %InitialOverall RORAlternative Investment, $ versus DN, % AB C DE-25,000-35,000-40,000-60,000-75,000A9.627.3 9.4 35.3 25.015.138.5 24.4C13.446.5 27.3D25.46.8E20.2(SO2PI1) If the projects above aremutually exclusive and the MARR is20% per year, the best alternative isSelect one:О а. ВO b. CO c. DO d. E

Solution (A) If the project is mutually exclusive and MARR = 20% Firstly let's arrange the project…

Five alternatives are being evaluated by the incremental rate of return method. Incremental Rate of Return, % Initial Overall ROR Alternative Investment, S versus DN, % A В с B CD E A - 25,000 -35,000 - 40,000 -60,000 -75,000 9.6 27.3 9.4 35.3 25.0 - B 15.1 38.5 24.4 13.4 46.5 27.3 - D 25.4 6.8 - E 20.2

Five alternatives are being evaluated by the incremental rate of return method. Incremental Rate of Return, % Initial Overall ROR Alternative Investment, S versus DN, % A В с B CD E A - 25,000 -35,000 - 40,000 -60,000 -75,000 9.6 27.3 9.4 35.3 25.0 - B 15.1 38.5 24.4 13.4 46.5 27.3 - D 25.4 6.8 - E 20.2

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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Calculate the geometric return of an investment with five year returns of 10%, (15%), 12%, 8% and (5%). Multiple Choice О 2.00% О 6.33% О 3.11% О 7.44% О 5.22%
27. Net Present Value (NPV) and Internal Rate of Return (IRR) calculation results for three separate projects appear below (the required rate of return is 8 %). NPV ($2,000) Project A Project B Project C $0 $4,500 IRR 7% 8% 9% nem moo nesto zi boheq asdysg sdT IS Which of the following statements is TRUE? 17. A) Project C is acceptable under NPV but is not acceptable under IRR B) Project A is not acceptable under NPV but is acceptable under IRR C) Project B is not acceptable for NPV but is acceptable for IRR D) Project C is acceptable for NPV and is acceptable for IRR bato eulsy inszeng ten ( muten to sien isme 1976512 21 700j0rqs tot bohaq absdysg s'll SS lly being (A
a. Find the expected return for each project. b. Find the proportion of funds in each project to achieve an expected portfolio return of 20%. (c) Calculate the correlation coefficient between projects A and B. d) Find the portfolio risk.
Please do not give solution in image formate thanku An investment generates the following monthly returns: 10.25%, -8.90%, 7.48%, 8.90%, 7.30%, 5.80%. Comparing with a risk-free benchmark rate of 5% for the time period, the investment is successful (i.e., investment return > 5%).
21. Write an equation for the toral expected return on tne investment the information using. Sir below. Std Dev. = 22 Min Ininas Investment=3000 subsequent investment= $ 50/mon. Rate of retum= 12%
You are considering the following two mutually exclusive projects. The crossover rate between these two projects is ___ percent and Project ___ should be accepted if the required return is greater than the crossover rate. Year Project A Project B 0 −$ 31,000 −$ 31,000 1 12,000 20,140 2 12,000 10,000 3 20,000 12,160
Below are the NPVs of a particular investment at two discount rates: At 5%, NPV = $9,500 At 8%, NPV = -$500 Estimate the IRR of this investment. Group of answer choices 1. 6.85% 2. 7.85% 3. 6.50% 4. 5.55%
The table below shows a comparison between three mutually exclusive alternatives. If the capital investment of A < B < C, and the MARR is 15%, arrange these alternatives based on decreasing Annual worth (From the Highest annual worth to the Lowest annual worth)? Comparison A C B-A C-A | C-B RR% 195 16.7 17.4 16.2 15.4 17.6 О а. ВСА O b. CAB О с. СВА O d. BAC company's required rate of return is 10% and, in using the present worth method, a project's net present value is zero, this indicates that the O a. project earns a rate of return of 10%. O b. project's rate of return exceeds 10%. C. project earns a rate of return of 0%. d. project's rate of return is less than the minimum rate required.
Economics Q1) study period is 10 years. MARR=12% A В Capital 11000 16000 13000 18000 investment Annual cost Market value PW (12%) 250 300 400 100 1000 1300 1750 2000 -12090 -17276 ??? -17921 a) PW of alternative C equals b) The rejected alternatives are c) The first comparison in the incremental analysis should be A (?-?) d) Write down the equation of the IRR A (D-B) e) Rank order the alternatives from best to the worst (if any) f) Draw the cash flow diagram for A (C-A)
Valuation Problem Calculate NPV and IRR for the following investment. Initial investment = $1,000,000 machine, the project term is 6 years, ncf yr 1 = 387,160 ncf yr 2 = 459,460 ncf yr 3 = 465,322 ncf yr 4 = 481,725 ncf yr 5 = 506,617 ncf yr 6 = 269.200 and the discount rate is 12%.
Justin Lieberman must earn a minimum rate of return of 16.79% as compensation for the risk of the following investment a. Use present value techniques to estimate the IRR on this investment. b. On the basis of your finding in part a, should Justin make the proposed investment? a. The yield on this investment is %. (Round to two decimal places.) Data table Initial Investment End of Year 1 2345 $15,119 Income $3,957 $4,879 $5,900 $3,601 $2,000 - X C

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