The factor that is normally used as the discount rate in NPV method. Introduction: Net present value (NPV): It is the method that helps estimate the worth of investment by deducting the present value of cash outflow from the present value of cash inflow . If the NPV is positive, the project is profitable and should be accepted and if the NPV is negative, the project is not profitable and should not be accepted.

Question

Want to see the full answer?

Answer 1

Question

Chapter 12, Problem 4DQ

Summary Introduction

To explain: The factor that is normally used as the discount rate in NPV method.

Introduction:

Net present value (NPV):

It is the method that helps estimate the worth of investment by deducting the present value of cash outflow from the present value of cash inflow. If the NPV is positive, the project is profitable and should be accepted and if the NPV is negative, the project is not profitable and should not be accepted.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

What is WACC and why would that be used as the discount rate?

why does an increase in the discount rate resuce the present value?

How is the PW analysis dependent on the rate of interest used for the PW computation?

Answer 2

Question

Chapter 12, Problem 4DQ

Summary Introduction

To explain: The factor that is normally used as the discount rate in NPV method.

Introduction:

Net present value (NPV):

It is the method that helps estimate the worth of investment by deducting the present value of cash outflow from the present value of cash inflow. If the NPV is positive, the project is profitable and should be accepted and if the NPV is negative, the project is not profitable and should not be accepted.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 12, Problem 4DQ

Summary Introduction

To explain: The factor that is normally used as the discount rate in NPV method.

Introduction:

Net present value (NPV):

It is the method that helps estimate the worth of investment by deducting the present value of cash outflow from the present value of cash inflow. If the NPV is positive, the project is profitable and should be accepted and if the NPV is negative, the project is not profitable and should not be accepted.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 12, Problem 4DQ

Summary Introduction

To explain: The factor that is normally used as the discount rate in NPV method.

Introduction:

Net present value (NPV):

It is the method that helps estimate the worth of investment by deducting the present value of cash outflow from the present value of cash inflow. If the NPV is positive, the project is profitable and should be accepted and if the NPV is negative, the project is not profitable and should not be accepted.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 12, Problem 4DQ

Summary Introduction

To explain: The factor that is normally used as the discount rate in NPV method.

Introduction:

Net present value (NPV):

It is the method that helps estimate the worth of investment by deducting the present value of cash outflow from the present value of cash inflow. If the NPV is positive, the project is profitable and should be accepted and if the NPV is negative, the project is not profitable and should not be accepted.

Answer 6

Chapter 12, Problem 4DQ

Summary Introduction

To explain: The factor that is normally used as the discount rate in NPV method.

Introduction:

Net present value (NPV):

It is the method that helps estimate the worth of investment by deducting the present value of cash outflow from the present value of cash inflow. If the NPV is positive, the project is profitable and should be accepted and if the NPV is negative, the project is not profitable and should not be accepted.

Answer 7

Chapter 12, Problem 4DQ

Summary Introduction

To explain: The factor that is normally used as the discount rate in NPV method.

Introduction:

Net present value (NPV):

It is the method that helps estimate the worth of investment by deducting the present value of cash outflow from the present value of cash inflow. If the NPV is positive, the project is profitable and should be accepted and if the NPV is negative, the project is not profitable and should not be accepted.

Answer 8

Expert Solution & Answer

Answer 9

Expert Solution & Answer

Answer 10

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 11

Ch. 12 - Prob. 1DQ Ch. 12 - Why does capital budgeting rely on analysis of...Ch. 12 - Prob. 3DQ Ch. 12 - Prob. 4DQ Ch. 12 - What does the term mutually exclusive investments...Ch. 12 - Prob. 6DQ Ch. 12 - If a corporation has projects that will earn more...Ch. 12 - What is the net present value profile? What three...Ch. 12 - How does an assetâ€™s ADR (asset depreciation...Ch. 12 - Assume a corporation has earnings before...

Solution Summary: The author explains Net present value (NPV) as a discount rate for determining the worth of investment by deducting cash outflow from cash inflow.

Concept explainers

Want to see the full answer?

Chapter 12 Solutions