Indicates a project should be accepted

Assignment Help Financial Management
Reference no: EM13942928

Which one of the following indicates a project should be accepted?

1. NPV = -$2,281

2. IRR = 13.8 percent; required return = 14.5 percent

3. Discounted payback = 3.41 years; required discounted payback = 3 years

4. None of the above

Reference no: EM13942928

Questions Cloud

What is the bonds price : ABC Company's bonds mature in 8 years, have a par value of $1,000, and make an annual coupon interest payment of $65. The market requires an interest rate of 7.5% on these bonds. What is the bond's price?
Currently the risk free rate and market premium : Currently the risk free rate is 1% and the market premium is 3%. Given this information, which of the following statements is correct?
What rate of return is built into the annuity : Suppose you just won the state lottery, and you have a choice between receiving $2,075,000 today or a 15-year annuity of $300,000, with the first payment coming one year from today. What rate of return is built into the annuity? Disregard taxes.
Which project should the firm choose if the cost of capital : Consider the following projects, X and Y where the firm can only choose one. Project X costs $600 and has cash flows of $400 in each of the next 2 years. Project Y also costs $600, and generates cash flows of $500 and $275 for the next 2 years, respe..
Indicates a project should be accepted : Which one of the following indicates a project should be accepted?
Currently has an operating cycle : Center Enterprises currently has an operating cycle of 58 days. You are analyzing some operational changes which are expected to increase the accounts receivable period by 4 days and decrease the inventory period by 3 days. The accounts payable turno..
Operating and cash cycles of the firm different : How are the operating and cash cycles of the firm different? Why are they important? Why is liquidity important? What strategies can a firm use to optimize its cash cycle? Discuss different forms of A/R acceleration.
What is the required rate of return on stock : Stock A has a beta of 1.30, and its required return is 13.25%. Stock B's beta is 0.90. If the risk-free rate is 4.75%, what is the required rate of return on B's stock? (Hint: First find the market risk premium.)
What is the firms required rate of return : ABC Company's stock has a beta of 1.32, the risk-free rate is 5.25%, and the market risk premium is 5.50%. What is the firm's required rate of return?

Reviews

Write a Review

Financial Management Questions & Answers

  What is the current yield for bond

Bond P is a premium bond with a 9 percent coupon. Bond D is a 5 percent coupon bond currently selling at a discount. Both bonds make annual payments, have a YTM of 7 percent, and have 10 years to maturity. What is the current yield for Bond P and Bon..

  Health services has four different projects

Suppose that Apex Health Services has four different projects. These projects are listed below, along with the amount of capital invested and estimated corporate and market betas: How does the riskiness of Apex's stock compare with the riskiness of a..

  Target capital structure-determine their cost of capital

Bartlett Company's target capital structure is 40% debt, 15% preferred, and 45% common equity. The after tax cost of debt is 6%, the cost of preferred is 7.50%, and the cost of common using reinvesting earnings will be $800,000. You were hired as a c..

  Assess risk and evaluate the internal control system

Last week you discussed the questions you would ask a CFO of a company before beginning an audit engagement. Think about this same conversation, but this week I want you to identify three specific questions you would as him/her which would help you t..

  What are the weights in equity and debt

The total market value of General Motors (GM) is $10 billion. GM has a market value of $7 billion of equity and a face value of $10 billion of debt. What are the weights in equity and debt that are used for calculating the WACC?

  What kinds of financial information exist in various places

What kinds of financial information exist in various places? What is the difference between information found on the Internet and other sources of information?

  Find the value of a small general-use building

Using the cost approach, find the value of a small general-use building with the following characteristics.

  Identify which of the three joint products iridium

Joint-cost allocation, process further or sell. Iridium Technologies manufactures a variety of flash memory chips at its main foundry in Anam, Korea. Allocate the $10,800,000 joint production cost to Apple, Broadcom, and Celeron using the NRV method...

  Suppose two years later from the original issuing date

XYZ Company is planning to issue some bonds. The bonds, with a $5,000 par value and the coupon rate of 12% will mature in 10 years. The interest will be paid semi annually. Suppose two years later from the original issuing date, the going rate in the..

  Find the interest rates earned

Find the interest rates earned on each of the following. Round each answer to two decimal places. You borrow $70,000 and promise to pay back $648,587 at the end of 15 years.

  Simple interest on its savings account balances

First City Bank pays 7 percent simple interest on its savings account balances, whereas Second City Bank pays 7 percent interest compounded annually. If you made a $6,000 deposit in each bank, how much more money would you earn from your Second City ..

  Compute the NCF-COC and NPV

We invest $10 million in a furniture factory. The information we have is as follows. The European Union subsidizes the investment up to 60% of the cost and 40% of the interest. After the first ten year period, the NCF and the expenses will grow forev..

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