One outflow followed by series of inflows

Assignment Help Financial Management

Reference no: EM132072812

1. If you assume that a project being considered has normal cash flows, with one outflow followed by a series of inflows, which statement would be correct?

a) The lower the cost of capital used to calculate a project's NPV, the lower the calculated NPV will be.

b) If a project's NPV is less than zero, then its IRR must be less than the cost of capital.

c) A project’s NPV is found by compounding the cash inflows at the IRR to find the terminal value (TV), then discounting the TV at the cost of capital.

d) The NPV of a relatively low-risk project should be found using relatively high cost of capital.

2. The CEO of the Riszen Group has started the planning process for the company's operations next year and she needs a forecast of the firm's AFN. Assuming the firm is operating at full capacity, and using the provided data and the AFN equation, what is the AFN for the coming year? Dollars are in millions. Last year's sales = S0 $350 Last year's accounts payable $40 Sales growth rate = g 30% Last year's notes payable $50 Last year's total assets = A0* $500 Last year's accruals $30 Last year's profit margin = PM 5% Target payout ratio 60%

a) $125.9

b) $119.9

c) $113.9

d) $108.2

3. The CEO of the Riszen Group has started the planning process for the company's operations next year and she needs a forecast of the firm's AFN. Assuming the firm is operating at full capacity, and using the provided data and the AFN equation, what is the AFN for the coming year? Dollars are in millions. Last year's sales = S0 $350 Last year's accounts payable $40 Sales growth rate = g 30% Last year's notes payable $50 Last year's total assets = A0* $500 Last year's accruals $30 Last year's profit margin = PM 5% Target payout ratio 60%

a) $125.9

b) $119.9

c) $113.9

d) $108.2

4. If a coupon bond sells at par, its current yield is equal its yield to maturity. Question 8 options:

a) True

b) False

Reference no: EM132072812

Questions Cloud

Raleigh wheels out steel bicycle marketing : From its 19th century roots as a British bicycle company, Raleigh has developed a worldwide reputation for marketing sturdy, comfortable

What is the rate of return on the investment : What is the remaining margin in the account? What is the rate of return on the investment?

Prepare the journal entries for outkast : The notional value of the call option is 400 shares, and the option price is $40. Prepare the journal entries for Outkast

What factors are driving india power industry : What factors are driving India's power industry, and what impact will they have?

One outflow followed by series of inflows : If you assume that a project being considered has normal cash flows, with one outflow followed by a series of inflows,

Discuss current or future applications of nanotechnology : Materials science is an interdisciplinary field where science and technology are used to develop and apply our understanding of matter.

Case study-benefits for part-time workers : What are some factors that should be considered when determining whether or not to offer benefits to part-time workers at the company in the case study?

What amount was stockholders equity at january : Archibald Cor poration's stockholders' equity at December 31, 2015 was $150,000. What amount was stockholders' equity at January 1, 2015

Explain whether the application of the theory was effective : Social environment factors associated with suicide attempt among low-income African Americans: the protective role of family relationship and social support.

User Account

All Pages