If project is assigned required rate of return equal to zero

Assignment Help Financial Management
Reference no: EM131022509

If a project is assigned a required rate of return equal to zero, then:

A. the timing of the project's cash flows has no bearing on the value of the project.

B. the project will always be accepted.

C. the project will always be rejected.

D. whether the project is accepted or rejected will depend on the timing of the cash flows.

E. the project can never add value for the shareholders.

Reference no: EM131022509

Questions Cloud

Mortgages of that maturity carry a fixed interest rate : A prospective homeowner wants to determine how much she can borrow in the form of a fixed-rate 20-year mortgage. Mortgages of that maturity carry a fixed interest rate of 9.00%. How large a mortgage can she afford, assuming she makes steady payments ..
Changes in the net working capital : Changes in the net working capital: A. can affect the cash flows of a project every year of the project's life. B. only affect the initial cash flows of a project. C. are included in project analysis only if they represent cash outflows. D. are gener..
Compute the coefficients of variation : Tim Trepid is highly risk-averse while Mike Macho actually enjoys taking a risk. Investments Returns: Expected Value Standard Deviation Buy stocks $ 9,450 $ 6,540 Buy bonds 7,520 2,660 Buy commodity futures 19,400 22,400 Buy options 14,900 16,600 a-1..
Calculate the profitability index for project : You are asked to evaluate the following two projects for the Norton corporation. Use a discount rate of 14 percent. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Calculate..
If project is assigned required rate of return equal to zero : If a project is assigned a required rate of return equal to zero, then:
Attempt to maximize the value of the firm : A manager should attempt to maximize the value of the firm by:
Estimates using the arithmetic average will probably tend : Estimates using the arithmetic average will probably tend to _____ values over the long-term while estimates using the geometric average will probably tend to _____ values over the short-term.
The equivalent annual cost method : The equivalent annual cost method is useful in determining: A. the annual operating cost of a machine if the annual maintenance is performed versus when the maintenance is not performed as recommended. B. the tax shield benefits of depreciation given..
What will the market price per share be after the split : Robinson's has 15,000 shares of stock outstanding with a par value of $1.00 per share and a market price of $36 a share. The balance sheet shows $15,000 in the common stock account, $315,000 in the capital in excess of par account, and $189,000 in th..

Reviews

Write a Review

Financial Management Questions & Answers

  What is golds company stock worth to you

The next year the common stock of Gold Corp. will pay a dividend of $5.82 per share. If the company is growing at a rate of 4.85 percent per year, and your required rate of return is 14.61 percent, what is Gold's company stock worth to you?

  Methods represents which step in the communication process

Gawker hired a firm in Japan that was versed in online publishing in that country in order to minimize which barrier to effective communication? Gawker has used teleconferences, video cinferences, off-site conferences, and a wide range of information..

  What is the net present value and internal rate of return

What is the Net Present Value (NPV) and Internal Rate of Return (IRR) of spending $350 today on an energy efficient appliance which will save you $150 a year for the next three years assuming you could invest this money elsewhere and earn 10%?

  Technology maturation-when should the panels be upgraded

Technology Maturation. Green Futures operates a solar panel power generation facility in Scottsboro, Alabama. The current field generates 15 million kilowatt-hours per year, but every year production drops off by 1 million kilowatt hours, as dust and..

  Tandard deviation of the minimum variance portfolio

The stock of Bruin, Inc., has an expected return of 25 percent and a standard deviation of 38 percent. The stock of Wildcat Co. has an expected return of 12 percent and a standard deviation of 43 percent. The correlation between the two stocks is .43..

  Estimate be for the new division’s cost of capital

Harry Davis is interested in establishing a new division that will focus primarily on developing new Internet-based projects. what would your estimate be for the new division’s cost of capital?

  Assumming you finance through dealer what will payments be

A new truck costs $34,000 and dealer offers 1.9% APR financing for 48 months (payments made at the end of month) Assumming you finance through dealer what will payments be?

  Total implied and actual transaction cost

You find that the bid and ask prices for a stock are $13.75 and $15.05, respectively. If you purchase or sell the stock, you must pay a flat commission of $20. If you buy 300 shares of the stock and immediately sell them. What is your total implied a..

  What would be the firms cash flow from operations

Dippity Doo-Dah Party Dips has revenues of $50,000, general & administrative expenses of $35,000, interest expense of $4,000 and depreciation expense of $4200. The firm is in the 38% tax bracket. What would be the firm’s cash flow from operations?

  Analyzing an average-risk project

Desai Industries is analyzing an average-risk project, and the following data have been developed. Unit sales will be constant, but the sales price should increase with inflation. Fixed costs will also be constant, but variable costs should rise with..

  What is the firms cost of preferred equity

Global Inc. has a preferred share issue outstanding with a current price of $26.80. The firm is expected to pay a dividend of $1.90 per share a year from today. What is the firm's cost of preferred equity?

  What is the present value of its growth opportunities

Tri-coat Paints has a current market value of $43 per share with earnings of $2.14. What is the present value of its growth opportunities (PVGO) if the required return is 5%?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd