Fin 301 Ch 9 Hw Quiz - MCQExams.com

A project will produce cash inflows of

$3,100 a year for 3 years with a final cash inflow of$ 4,400 in YearThe project's initial cost is

$10,What is the net present value if the required rate of return is 16 percent?-$ 311.02-

$1,007.66$ 1,650.11

$2,188.98$ 1,168.02

0%
2.91 years
0%
Accept; 11.64
0%
-$306.15; reject
0%
-$1,007.66

You are comparing two mutually exclusive projects. The crossover point is 12.3 percent. You have determined that you should accept project A if the required return is 13.1 percent. This implies you should:Always accept Project A.Be indifferent to the projects at any discount rate above 13.1 percent.Always accept Project A if the required return exceeds the crossover rate.Accept Project B only when the required return is equal to the crossover rate.Accept Project B if the required return is less than 13.1 percent.

0%
Always accept Project A if the required return exceeds the crossover rate.
0%
An increase in the aftertax salvage value of the fixed assets.
0%
the ARR cannot be computed (no NI)
0%
Accept A at 11.7 percent and neither at 13.5 percent.

Project A has cash flows of -

$74,900,$ 18,400,

$26,300, and$ 57,100 for years 0 to 3, respectively. Project B has cash flows of -

$79,000,$ 18,400,

$22,700, and$ 51,500 for years 0 to 3, respectively. Both projects are independent and use straight-line depreciation to a zero balance over the project life. Neither project has any salvage value and both have a required accounting return of 11.5 percent. Should you accept or reject these projects based on the average accounting return?Accept Project A and reject Project BReject Project A and accept Project BAccept both projectsReject both projectsThe AAR cannot be computed.

0%
the ARR cannot be computed (no NI)
0%
Accept A at 11.7 percent and neither at 13.5 percent.
0%
Yes; The MIRR is 14.45 percent.
0%
13.58 percent

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