Required return that exceeds its rate of return

Assignment Help Financial Management

Reference no: EM13813431

Which one of the following indicates a project has a required return that exceeds its rate of return?

a positive NPV

a payback period that exceeds the required period

a PI more than 1.0

a negative accounting rate of return

A negative NPV

Reference no: EM13813431

Questions Cloud

How institutional investors and individuals participate : How institutional investors and individuals participate in money, stock, and bond markets, and equity securities? Describe how each one of these markets is utilized by each type of investor.

What is the npv of accepting the system : No More Books Corporation has an agreement with Floyd Bank whereby the bank handles $7.0 million in collections a day and requires a $450,000 compensating balance. No More Books is contemplating canceling the agreement and dividing its eastern region..

Project beta and internal rate of return : Project Alpha has an internal rate of return (IRR) of 15 percent. Project Beta has an IRR of 14 percent. Both projects have a required return of 12 percent.

Allocate the joint costs using relative weight : Landmark Coal operates a mine. During July, the company obtained 500 tons of ore, which yielded 250 pounds of gold and 63,700 pounds of copper. The joint cost related to the operation was $500,000. Gold sells for $325 per ounce and copper sells for $..

Required return that exceeds its rate of return : Which one of the following indicates a project has a required return that exceeds its rate of return?

Regression and inventories : Charlie's Cycles Inc. has $120 million in sales. The company expects that its sales will increase 7% this year. Charlie's CFO uses a simple linear regression to forecast the company's inventory level for a given level of projected sales. What are you..

Cash flow from operating activities using the annual reports : Obtain the required information about GE’s industrial cash flow from operating activities using the annual reports of GE for the years 2011 thru 2014. Based on the data you obtained in (b) above, state whether the cumulative industrial cash flow from..

Issues to be concerned about when increasing leverage : Debt Versus Equity Financing Look Before You Leverage!“Why do things have to be so complicated?” said Bob to Andrew, as he sat at his desk shuffling papers around. “I need you to come up with a convincing argument.” Bob’s company, Symonds Electronics..

What is total cost of the line of credit : Your client is a biochemist who has discovered a technique to create a new biofuel. He estimates it will take him 2 years to make it economically feasible at a cost of $2,000,000. Assume that loan is set up as interest-only (meaning any accrued inter..

User Account

All Pages