FM
Your aunt has promised to give you $5,000 when you graduate from college. You expect to graduate three years from now. If you speed up your plans to enable you to graduate two years from now, the present value of the promised gift will:
Increase
which of the following are advantages of the payback method of project analysis
Liquidity, bias, ease of use
If a firm accepts Project X it will not be feasible to also accept Project Z because both projects would require the simultaneous and exclusive use of the same piece of machinery. These projects are considered to be:
Mutually exclusive
the interest earned on both the initial principle and the interest reinvested from prior periods is called
Compound interest
which one of the following will decrease the net present value of a project
increasing the projects initial cost a time 0
which of the following methods predicts the amount of money by which the values of a firm will change if a project is accepted
net present value
which one of the following statements related to the internal rate of return(IRR) is correct
the IRR is equal to the required return when the net present value is equal to zero
which one of the statements is true
the present value of a growing perpetuity will decrease if the rate is increased
Javangula Foods is considering two mutually exclusive projects and has determined that the crossover rate for these projects is 12.3 percent. Given this information, you know that:
the project that is acceptable at a discounted rate of 12 percent should be rejected at a discounted rate of 13 percent
which one of the following statements correctly defined a time value of money relationship
time and present value are inversely related, all else held constant
Nirav just opened a savings account paying 2 percent interest, compounded annually. After four years, the savings account will be worth $5,000. Assume there are no additional deposits or withdrawals. Given this information, Nirav:
could have deposited less money today and still had 5,000 in four years if the account paid sa higher rate of interest
