When the net present value (NPV) and the internal rate of return (IRR) rankings conflict for mutually exclusive projects Blank______. Multiple choice question. accept the project with the higher IRR accept the project with the lower NPV accept the project with the lower IRR accept the project with the higher NPV

When the net present value (NPV) and the internal rate of return (IRR) rankings conflict for mutually exclusive projects Blank______. Multiple choice question. accept the project with the higher IRR accept the project with the lower NPV accept the project with the lower IRR accept the project with the higher NPV

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 3DQ

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Similar questions

If a particular project has multiples rates of return (i.e., multiple values of IRR), it means that the project is economically more attractive as compared with a project with a single IRR. Group of answer choices True False
A project should be accepted if its return is Blank______ the required return. Multiple choice question. not equal to equal to above
What would you recommend if the benefit / cost ratio is >1: Select one: a. The project must be accepted. b. Benefit / cost ratio cannot be >1 c. The project must be rejected. d. Benefit / cost ratio always =1
What would you recommend if the benefit / cost ratio is >1: Select one: a. Benefit/cost ratio always =1 b. The project must be rejected. c. Benefit / cost ratio cannot be >1 d. The project must be accepted
Using IRR, a project is rejected if the IRR a. is equal to the required rate of return. b. is less than the required rate of return. c. is greater than the cost of capital. d. is greater than the required rate of return. e. produces an NPV equal to zero.
How do you apply the Net Present Value rule when multiple projects are available and you have the added constraint of accepting only one project?
is this accurate
b) Using data provided below, compute appropriate values and fill the table below to help identify the least risky and most risky project among alternatives A, B and C using appropriate criteria. Project EV D D2 Var St. dev Coef.0f Var TT 12 0.2 A 18 0.7 28 0.1 10 0.3 В 22 0.6 32 0.1 11 0.1 C 21 0.8 31 0.1 Where n denotes the profit, P is the probability, EV stand for Expected value, D is the Deviation, D$ denote the deviation square, St. dev is the standard deviation and finally Coef.of Var is the coefficient of variation.
29....When using the NPV method the decision making rationale includes the following (select all that apply): a.If projects are mutually exclusive, accept the project with the highest positive NPV. b.If projects are independent, accept if the project NPV<0. c.If projects are independent, accept if the project NPV>0 d.If the projects are mutually exclusive, accept the project with lowest NPV.
n 0 1 2 3 4 5 6 7 8 9 10 A -$250 $60 $970 B -$200 $90 $90 $60 $60 Net Cashflow с -$70 $20 $10 $5 -$50 $60 $50 $40 $30 $20 $10 D -$300 $270 $250 -$129 -$20 $120 $40 E -$90 -$100 -$50 $0 $150 $150 $100 $100
e. IMPORTANT Note that from this example that a higher IRR for a nindividual alternative does not gurantee that the alternatvie is more economical than the one with a lower IRR. It is the incremental IRR value relative to the MARR that determines which alternative is more economical. The result of the incremental analysis are always the same as those of the PW,AW, or FW anaylsis
The internal rate of return (IRR) is the: Multiple Choice discount rate that results in a zero net present value for the project. discount rate that causes a project's aftertax income to equal zero.