Which of the following statements concerning the payback period, is not true? a. The payback period measures the time that a project will take to generate enough cash flows to cover the initial investment.incorrect b. the payback period involves a simple method c. the payback period takes into account the time value of money d. the payback period ignores cash flows

Q: Which of the following is an advantage of using the payback period method for project selection?…

A: The objective of the question is to identify the advantage of using the payback period method for…

Q: Assume that both Projects A and B have normal cash flows, with one outflow followed by a series of…

A: IRR(Internal ROR) is the rate at which NPV(Net Present Value) of a project is zero. At IRR, PV of…

Q: -When a capital budgeting project generates a positive net present value, this means that A.…

A: Capital budgeting techniques are those techniques which are used for analysing which projects are…

Q: Which of the following cash flows should not be considered when evaluating a project? Changes in…

A: Following cashflows should not be considered when evaluating a project-

Q: Sophisticated capital budgeting techniques do not A. examine the size of the initial outlay. B.…

A: Capital budgeting techniques are used to understand the feasibility/acceptability of long term…

Q: Which of the following is true of the cash payback period? a.the longer the payback, the longer the…

A: Payback period is the period under which the amount of investment is expected to be recovered.…

Q: Which of the following statements is false? (You may select more than one answer.)a. The payback…

A: Cash payback method: Cash payback period is the expected time period which is required to recover…

Q: One of the following methods are not a method to evaluate projects: Return on investment Discounted…

A: Capital budgeting: It implies to the process of evaluating different projects based on their…

Q: A project is rejected under the net present value method when: a. The percentage return is greater…

A: Capital budgeting is a process used to gauge if an investment should be made in a particular project…

Q: Why the payback method is often considered inferior to discounted cash flow in capital investment…

A: Payback period is capital budgeting technique which tells how much time will it take for Ann…

Q: Which of the following statements is CORRECT? Assume that the project being considered has normal…

A: Internal rate of return (IRR) is the discount rate of a project which makes its NPV=0. It is a…

Q: Assume a project has normal cash flows (i.e. the initial cash flow is negative and all other cash…

A: Option B) - All else equal, a project's N.P.V increases as the cost of capital declines.

Q: Which of the following are significant flaws with the Payback Period Method? (Select all that apply)…

A: Payback period method is a capital budgeting method which will help in finding time period within…

Q: Methods that ignore the time value of money in capital investment appraisal include which of the…

A: Net present value – Net present value is the difference between present value of cash inflows of…

Q: Which of the following is not a recommended solution if the comparison of projected cash flows with…

A: Option (a): This is a viable option. Finding additional income to manage the shortfall Option (c):…

Q: All of the followings are True when the net present value method is used to choose between two…

A: Net present value is the excess of present value of cash flows over cash outflows or initial…

Q: Which of the following cash flows are not considered in the calculation of the annual cash-flow for…

A: Proceeds from selling an old asset which is being replaced by a new asset It does not impact the…

Q: If the project’s weighted average cost of capital (WACC) is 7%, what is its NPV? a.)$340,887…

A: Payback period (PBP) refers to the period or duration within which the company is able to recover…

Q: All of the following statements regarding NPV are true EXCEPT: a. A positive NPV indicates the…

A: Net Present Value : It is the net of present value of cash inflow and present value of outflow.…

Q: When evaluating projects using internal rate of return,?  A. projects having lower early-year cash…

A: Internal rate of return is the rate of return at which the net present value is equal to zero.…

Q: 4 The following statements refer to the accounting rate of return (ARR)  The ARR is based on the…

A: The accounting rate of return (ARR)  reflects the expected percentage of return on an investment…

Q: return

A: MIRR or the modified internal rate of return assumes that the company's cash flows can be reinvested…

Q: Which of the following statements is CORRECT? O Projects with "normal" cash flows can have two or…

A:

Q: The IRR evaluation method assumes that cash flows from the project are reinvested at the same rate…

A: MIRR refers to modified internal rate of return. MIRR, as a capital budgeting tool, seeks to remove…

Q: A project's present value can be decreased by, I. decreasing the required discount rate (required…

A: There are various reasons for decreasing the present value of the project some of them are as…

Q: Which of the following is a disadvantage of the IRR project evaluation method? Question 5Select…

A: IRR is also known as Internal Rate of Return.. It is a capital budgeting technique which helps in…

Q: Which of the following best explains the limitations of using WACC as a discount rate for evaluating…

A: Thanks for the Question: Bartleby's Guideline “Since you have asked multiple question, we will solve…

Q: Can replacement chain analysis be used if project cash flows are different each time the project is…

A: Several statements have been given regarding the suitability of replacement chain analysis,  if…

Q: Which of the following statements is CORRECT? Assume that the project being considered has normal…

A: IRR stands for Internal Rate of Return, which is a financial metric used to evaluate the…

Q: The payback period method has been criticized for not taking the time value of money into account.…

A: Discussion on payback period method:Payback period: It represents the period required to recover the…

Q: Consider the following statements concerning the payback method of investment appraisal. 1. It…

A: The payback method of investment appraisal is a simple technique that calculates the amount of time…

Q: The payback criterion has problem(s) like Select one: O A. It considers the time value of money O B.…

A: The payback period refers to the period that is consumed by a project for meeting all its initial…

Q: An analysis of a proposal by the net present value method indicated that the present value of future…

A: The objective of the question is to understand the implications of a positive net present value…

Q: When the present value of the cash inflows exceeds the initial cost of a project, then the project…

A: If present value of cash inflows exceeds the initial cost of a project, then NPV of the project will…

Q: The IRR evaluation method assumes that cash flows from the project are reinvested at the same rate…

A: Modified internal rate of return (MIRR) is the upgraded version of the internal rate of return,…

Q: . A. it is very A disadvantage of the average rate of return method of capital investment analysis…

A: Average rate of return method of capital investment analysis:The average rate of return is the…

Q: 1.True or flase . Even thugh thr amounts and timing of the cash flow may differ, the appropiate LCM…

A: ''Since you have asked for multiple question, we will solve the first question for you. If you want…

Q: An analysis of a proposal by the net present value method indicates that the present value of future…

A: The objective of the question is to understand the implications of a negative net present value…

Q: 3. In a comparison of the NPV and IRR techniques, which of the following is true? statements A. Both…

A: In this question, we are required to determine the correct statement regarding NPV and IRR.

Q: The AW of a project can be estimated by reducing all cash flows including the capital investment,…

A: Annual worth is the equivalent annual value for the cash flows for the given investment project.

Q: One of the benefit of the pay back period is that it focuses on the timing of the project`s benefits…

A: Payback period is a time taken to recover initial investment

Q: Why do we only include free cash flows when evaluating a project using the NPV project evaluation…

A: Net Present Value is one of the capital budgeting techniques. It is defined as the difference…

Q: All of the following are weaknesses of the payback period EXCEPT Select one: a. only an implicit…

A: Payback period is period required to recover initial investment in the project.

Q: An advantage of the internal rate of return method is that a.it considers the time value of money.…

A: Capital budgeting is the process of selecting and choosing best alternatives among the available…

Q: A characteristic of the payback method is that it: (See your Chapter 25 notes, page 9) Uses accrual…

A: The question is asking about the characteristics of the payback method, which is a capital budgeting…