Aramco company has a cost of capital of 13 percent and is evaluating three capital projects. The internal rates of return are as followsInternal RateProjectof Return12%153.13The firm shouldO a, accept Project 2 and reject Projects 1 and 3O b. accept Project 1 and reject Projects 2 and 3Oc accept Projects 2 and 3 and reject Project 1O d. accept Project 3 and reject Projects 1 and 2

IRR is the rate at which Present value of cash Inflows is equal to Present Value of cash Outflows.…

rojects. The ihta Tal fates of return are as folloWS: Internal Rate Project of Return 11 12% 15 13 The firm should O a. accept Project 2 and reject Projects 1 and 3 O b. accept Project 1 and reject Projects 2 and 3 Oc accept Projects 2 and 3 and reject Project 1 O d. accept Project 3 and reject Projects 1 and 2

rojects. The ihta Tal fates of return are as folloWS: Internal Rate Project of Return 11 12% 15 13 The firm should O a. accept Project 2 and reject Projects 1 and 3 O b. accept Project 1 and reject Projects 2 and 3 Oc accept Projects 2 and 3 and reject Project 1 O d. accept Project 3 and reject Projects 1 and 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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2. Based on identified IRR, give your decision either to Accept or Reject a proposal given a cost of capital as follows:. IRR 15% Cost of Capital Decision d. 13 e 12 16 g 21 10
Consider the following two projects: Cash flows Project A Project B C0�0 −$ 240 −$ 240 C1�1 100 123 C2�2 100 123 C3�3 100 123 C4�4 100 a. If the opportunity cost of capital is 8%, which of these two projects would you accept (A, B, or both)? b. Suppose that you can choose only one of these two projects. Which would you choose? The discount rate is still 8%. c. Which one would you choose if the cost of capital is 16%? d. What is the payback period of each project? e. Is the project with the shortest payback period also the one with the highest NPV? f. What are the internal rates of return on the two projects? g. Does the IRR rule in this case give the same answer as NPV? h. If the opportunity cost of capital is 8%, what is the profitability index for each project? i. Is the project with the highest profitability index also the one with the highest NPV? j. Which measure should you use to choose between the projects?
5. LL Consider the following cash flows of a project: Year Year 1. 50 0. 2. 3. 4. 1. Find the internal rate of return for this investment. 0. 20. Multiple Choice < Prev 10 of 15 Next here to search F11 F12 F4 F5 69 81 9F-
please be soecific w answer pls complete the box
Compute the Pl statistic for Project X and note whether the firm should accept or reject the project with the cash flows shown as follows if the appropriate cost of capital is 10 percent. Time: Cash flow: Multiple Choice 0 1 -250 75 -0.0977 percent, reject 24.41 percent, accept -9.77 percent, reject -24.41 percent, reject 2 0 3 100 4 5 75 50
8. NPV profiles An NPV profile plots a project's NPV at various costs of capital. An example NPV profile is shown below: Identify the range of costs of capital that a firm would use to accept and reject this project, and answer the questions that follow. NPV (Dollars) 600 500 400 300 200 100 0 ← -100 -200 -300 A 2 4 6 8 10 12 14 16 DISCOUNT (REQUIRED) RATE (Percent) The project represented by triangle A should be B 18 20 This NPV profile demonstrates that as the cost of capital increases, the project's NPV ?
Consider the following figure. If firm A were to use the average or composite WACC it would Rate of Return 13.0 (5) 11.0 10.0 90 Project L 70 70 Division L's WACC О Riskov Division H's WACC WACC Project H Composite WACC Firm A Risk Riskov O accept Project L and reject Project H O be making the right decisions on acceptance or rejection of both projects O accept both Project L and Project H O reject both Project L and Project H O accept Project H and reject Project L
Please give me answer very fast in 5 min sau
A project requires an investment of 4 at times o and 6. It has a single positive cash flow of 12 at time 3. What is the (positive) Internal Rate of Return on this project? A B C D E 0.09 0.11 0.23 0.38 0.50
The table below shows internal rate of retum for three investment projects A, B and C and there differences. By capital investment, A
12.
30- If an investment is producing an internal rate of return that is equal to therequired return, the Net Present Value of the project will be ____ and theProfitability Index of the project will be ______. a. Negative; Greater than oneb. Negative; Onec. Zero; Oned. Positive; Onee. Positive; Greater than onef. Zero; Less than one

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