For capital budgeting projects, which of the following statements is CORRECT? Group of answer choices An extremely high required rate of return should be used to find the NPV of a relatively low risk project. All of these answer choices are correct. If a project’s NPV is less than zero, then its IRR must be less than the required rate of return. If a project’s NPV is greater than zero, then its IRR must be less than zero. The lower the required rate of return, the lower the calculated NPV

Q: In capital budgeting, risk can be measured from three perspectives. Explain THREE (3) measures of a…

A: Risk is an important element of capital budgeting and a company selects  a project after doing a…

Q: For the purpose of performing capital budgeting analysis, we need to look at incremental cash flows…

A: In capital budgeting analysis, businesses evaluate potential investment opportunities to determine…

Q: Explain what a discounted cash flow method of making capital budgeting decisions is. Why are…

A: The discounted cash flow (DCF) methodology is a financial valuation method used to establish the…

Q: What are the advantages of using the NPV method of assessing capital budgeting projects over the Pay…

A: Capital budgeting analysis is useful to know which projects are profitable and which are not. There…

Q: WACC is only an appropriate discount rate for a project of average risk—in other words, a project…

A: According to bartleby guidelines,  if multiple questions are asked, then 1st question needs to be…

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: chance that a cash flow will turn out to be worse than the estimate. b. the chance that a…

A: Step 1 The planning process used to assess whether an entity's long-term investment is appropriate…

Q: Please explain why the net present value (NPV) method is preferred over the payback method when…

A: NPV method is preferred over payback method because of following reasons 1. NPV method shows project…

Q: A project’s IRR is the discount rate that causes the PV of the inflows to equal the project’s cost.…

A: The given statement is true.

Q: Which capital budgeting projects are ?preferred اخترأحد الخیارات a. Higher payback period O b. None…

A: Various decisions are required to be taken by the management before making any decisions related to…

Q: ect has multiples rates of return (i.e., multiple values of IRR), it means that the project is…

A: IRR is the internal rate of return and is the break even rate of return at which the present value…

Q: There Is no correlation between net present value and Internal rate of return. A project with a…

A: Net present value that is NPV difference between present value of cash flow and initial investment.…

Q: If the net present value (NPV) of a standard capital budgeting project equals zero:   a. The…

A: Net present value is the current value of future cash flows.

Q: In capital budgeting, a project is accepted only if the internal rate of return equals or: a.…

A: Internal rate of return is often used to determine the financial feasibility of an investment…

Q: The capital budgeting tools: Net Present Value, Payback Period, and Internal Rate of Return. Which…

A: There are different methods of capital budgeting method.

Q: Which of the following decision measures should capital budgeting decision makers consider? Select…

A: Solution:- Capital budgeting means investment decision. It involves various methods and techniques…

Q: Critically think and outline the difficulties that might come up in actual applications of the…

A: The following are the difficulties of capital budgeting: Forecasting the cash flow The time horizon…

Q: Which of the following is a problem associated with capital budgeting? Select all that apply.…

A: capital budgeting helps organizations make well-informed investment decisions, manage risks, and…

Q: Which of the statements below describes the correct capital budgeting decision​ rule? i. Reject a…

A: Investors assess the value of a possible investment project through the capital budgeting process.…

Q: Debt service coverage ratio (DSCR) is a measure used to determine the project's ability to cover its…

A: Debt service coverage ratio (DSCR) is a measure used to determine the project's ability to cover its…

Q: What is a capital budgeting technique that generates decision rules and associated metrics for…

A: The capital budgeting technique help to evaluate the acceptibility and rejection of a particular…

Q: Which of the following is true? Discounted Payback Period is by definition longer than the…

A: The longer it takes to recover the cost of capital investment, the longer it will take for the…

Q: Explain the WACC in the context of a hurdle rate, return on invested capital (ROIC), an optimal…

A: WACC stands for a weighted average cost of capital and refers to the average cost taht is expected…

Q: The internal rate of return (IRR) is the: Multiple Choice discount rate that results in a zero net…

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

Risk Management Techniques

Risk management is the procedure of recognizing, analyzing, monitoring, and preventing the risks and threatening factors of investments and business. Risks can arise from various factors including internal controls, market changes, natural disasters, and failure in productions. Risk management techniques enable entities to control and minimize the risks as well as the threatening factors of the business and it also helps to improve the business.