When comparing two mutually exclusive alternatives by the ROR method, if the rate of return on the alternative with the higher first cost is less than that of the lower first-cost alternative: (a) The rate of return on the increment between the two is greater than the rate of return for the lower first-cost alternative (b) The rate of return on the increment is less than the rate of return for the lower first-cost alternative (c) The higher first-cost alternative may be the better of the two alternatives (d) The lower first-cost alternative should be selected

Q: Which of the following best represents the relationship between the weighted average cost of capital…

A: WACC is the weighted average cost of capital whereas MARR is minimum acceptable rate of return.

Q: lue (NPV) anc g decisions? Pl

A: Introduction : Net present value  can be understood as the value which depicts the actual worth…

Q: ected rate of return concept differ from that of the rea

A: There are many method of valuation of stock based on expected rate and realized return and dividends…

Q: Show by using equations or a diagram, that an expected utility maximizer requires a higher return…

A: The objective of the question is to demonstrate that an investor who maximizes expected utility, a…

Q: Pick ONE of the two options... Option 1: Diminishing marginal utility holds that the additional…

A: One would experience diminishing marginal utility for a good or service over time as they became…

Q: The W.A.C.C. is a :  a Composite opportunity cost metric  b Simple opportunity cost metric  c…

A: The overall cost of capital, also known as the Weighted average cost of capital (WACC), is the…

Q: Assume benefit is unchanged, how to manipulate  the cost to have positive NPV (net present value)

A: Net Present Value is the difference between PV of all cash inflows (benefits) and PV of all cash…

Q: Compute for the Modified Payback Period of opportunity #1. Compute for the Modified Payback Period…

A:

Q: What is limitation of Payback period, Net Present Value (NPV) and Internal rate of return (IRR).…

A: i) Payback period: Payback period is the expected time period which is required to recover the cost…

Q: market value

A: Market value refers to the estimated worth of asset, which is based on the willingness of the buyer…

Q: The break-even value calculation is similar to the calculation we use for theinternal rate of…

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

Q: If the internal rate of return (IRR) is less than the cost of capital, then the investment is…

A: False If the internal rate of return (IRR) is less than the cost of capital, then the investment is…

Q: Which of the following is not a variable in the basic present value equation? Multiple Choice…

A: Investors are holding securities for the purpose of gaining the returns. The return is calculated…

Q: Identify two disadvantages of using the payback period for comparing investments.

A:

Q: When npv is negative, the discount rate is greater than the actual return on investment. A.…

A: Net present value is the method used in capital budgeting to analyse various investments, projects,…

Q: lternatives’ useful lives are different, B/C ratio analysis should preferably be based on: Select

A: Introduction : In simple words, the benefit to cost ratio is method to evaluate the effectiveness of…

Q: Compare the mutually exclusive alternatives based on the rate of return?

A: Mutually exclusive projects are the projects out of which one best project is selected due to lack…

Q: When the profitability index is equal to zero, the benefits equal the costs. True False

A: Profitability Index is defined as the ratio between the present value of cash inflow to the present…

Q: explain the disadvantages of each criteria; payback period, discounted payback, NPV, IR

A: To determine the economic feasibility of capital investment, several capital budgeting analysis…

Q: A realized return is the rate of return actually earned on an investment. Group of answer choices…

A: Return: Return is defined as the money attained or lost on an investment through certain time…

Q: The potential benefit of one alternative that is lost by choosing another is known as a. An…

A:

Q: Which one of the following statements is correct? a. If NPV is positive, IRR will be less than…

A: In order to determine the Net present value, the initial cash outflows is required to be subtracted…

Q: If the internal rate of return (IRR) of a well-behaved investment alternative is equal to MARR,…

A: MARR is the minimum return the management requires from a project after adjusting the risks and…

Q: Does the Present Value (PV) technique is based on return?

A: One of the important decisions that are taken by the management is to make the investment decisions…

Q: Consider the following two mutually exclusive projects being considered by an agency. The agency's…

A: As per our guidelines, we are supposed to answer only 3 sub-parts (if there are multiple sub-parts…

Q: The NPV profile: O A. shows the payback period-the point at which NPV is positive. B. shows the…

A: The correct option is : Option D) B and C are correct.