appropriate option (i) The rate of return method does not take care of timings of returns. (ii) Simple Payback method does not consider time value of money.
Q: Which of the following method is not based on concept of time value of money? A. Discounted payback…
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A: Step 1 The discounted payback period (DPB) is the time it takes for a project's original cost to…
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A: Interest rate risk is the risk arising from the fluctuations in the interest rates. It depends…
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A: Payback period is the amount of time required to recover initial investment. Regular payback period…
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Q: An investment computed at compound interest is always a better option than an investment computed at…
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Q: explain why payback period is not a preferred method
A: The payback period is a period in which the total costs of an investment are recovered through cash…
Q: Give at least two reasons for choosing the net present value method and at least two reasons each…
A: Below are the reasons for choosing the net present value method: Time value of money: The net…
Q: Differences between the ERR and the IRR include the following: a. The ERR will yield a unique…
A: From the various given statements, we have to find the difference between the internal rate of…
Q: Which of the following statements are true regarding the payback period of an investment? It does…
A: Answer: The correct option is (4) All of the above.
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A: Payback period is the period for time taken of project to repay the initial investment. Payback…
Q: One theoretical disadvantage of both payback methods-compared to the net present value method is…
A: Regular payback period is simple the time required to required to recover initial amount of…
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Q: echnical problems associated with the internal rate of return include:
A: IRR (Internal Rate of Return): It is the rate of return that makes the net present value of the…
Q: Why is it true that a reinvestment rate is implicitly assumed whenever we find thepresent value of a…
A: Discounting is the method of assessing the real value of a potential transaction or collection of…
Q: Which of the following is not a discounted technique Select one: a. Net present value b. Discounted…
A: Discounted technique is a technique to determine the present value of future cash flows.
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A: This question can be solved with the help of 2 examples. Example 1 Initial investment=15000 Discount…
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Q: Question 2 Which one of the following methods of analysis could completely ignore some cash flows?…
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Q: Which ones identify the disadvantages of the payback rule? A. Very simple and easy to apply. B.…
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Q: Which of the following is not a variable in the basic present value equation? Multiple Choice…
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Q: O Payback does not consider the time value of money
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A: Since you have posted multiple questions, we shall be solving the first one for you. In case you…
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Q: How would an increase in the interest rate or a decrease in the number of periods until the payment…
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Q: The risk-adjusted discount rate reduces investment. True or false?
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A: the increase demand of money shift the demand curve up.
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Q: Give an example of a strength and a weakness of the accounting rate of return approach.
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Q: When performing present worth analysis, a future worth taking inflation into consideration tends to…
A: Present worth is computed by discounting the future cash flows from the security or the project.
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A: Time value of money refers to decline in value of money with the passage of time due to inflation…
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A: Answer- Ranking errors can occur when a selection among mutually exclusive alternatives is based…
Q: Why do the payback period analysis fail to recognize the difference between the present and future…
A: Pay-Back (PB) Period is time in which Initial outlay related to proposed investment is completely…
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- Which of the following is not a discounted technique Select one: a. Net present value b. Discounted Payback period c. None of the option d. Internal Rate of Return e. Profitability index1. True or false. to apply the rate of return analysis correctly, we need to classify an investment i as either simple or non-simpleWhich of the following statements about payback (payback period) is most correct? a. Payback is a measure of time breakeven. b. Payback is a rough measure of risk. c. Payback is a rough measure of liquidity. d. Both a. and b. are correct. e. Answers a., b., and c. are all correct.
- Give typing answer with explanation and conclusion Please could you anwser it with true or false : Q1)Risk-neutral evaluation assumes that the expected return on the underlying asset is the risk-free rate and discounts at the risk-free rate.If the internal rate of return (IRR) of a well-behaved investment alternative is equal to MARR, which of the following statements about the other measures of worth for this alternative must be true? i. PW = 0 ii. AW = 0. Solve, a. I onlyb. II only c. Neither I nor II d. Both I and II.Theta measures an option's: Multiple Choice O O intrinsic value. volatility. rate of time decay. sensitivity to changes in the value of the underlying asset. sensitivity to changes in the risk-free rate.
- An advantage of the internal rate of return method is that a.it considers the time value of money. b.it can rank proposals of equal lives. c.it considers the cash flows of the investment. d.All of these choices are correct.If security A's expected return increases while security B's price increases, then these assets vary in Multiple choice question. a.) opposition b.) tandem c.) no discernible way I have the answer but do not understand why it is oppostion and not tandem...An investment computed at compound interest is always a better option than an investment computed at simple interest. A. True B. False
- Identify the one true statement. a. The B/C method determines the ratio of the present worth of benefits to the negative of the future worth of the investments. b. The CW method determines the present worth using a finite planning horizon. c. The IRR method determines the interest rate that yields a future worth of zero. d. The ERR method determines the interest rate that yields a present worth of zero.1. Define the components of holding period return. Can any of these components be negative? 2. How do you understand an investment risk and what statistic tools can be used to measure it?Which of the following decision criteria is the easiest to use and very popular among investors? O Payback period. O Internal rate of return. O Average accounting return. Net present value. O Discounted return on investment.