Assume a project has normal cash flows. All else equal, which of the following statements is CORRECT? Group of answer choices A project's discounted payback increases as the WACC declines. A project's MIRR is unaffected by changes in the WACC. A project's regular payback increases as the WACC declines. A project's IRR increases as the WACC declines. A project's NPV increases as the WACC declines.

Q: A project's IRR: A) All of these answers are correct. B is the average rate of return necessary to…

A: IRR is the rate that would result in net present value of future cash flows equal to exactly Zero.

Q: which of the following statement is true>? 1. return on equity is the ratio of total assets to…

A: Capital budgeting is a way to evaluate profitability of new projects or investment by using various…

Q: ve determined the profitability of a planned project by finding the present value of all the cash…

A: Present value of cash flow is related to the discount rate and the period of cash flow of the…

Q: Which of the following statements is false? (You may select more than one answer.)a. The payback…

A: Cash payback method: Cash payback period is the expected time period which is required to recover…

Q: Explain how inflation impacts capital budgeting analysis.  Why do we care? How is NPV impacted if…

A: Nominal rate and inflation rate are related to each other through real rate as shown below. Nominal…

Q: 1. Which of the following is not true? Group of answer choices The method in which we calculate a…

A: Capital Budgeting techniques and methods are used to measure and evaluate the potentiality of…

Q: What refers to the interest rate at which the present work of the cash flow on a project is zero of…

A: The RoR can be used with any asset that was purchased at some point in the past and will provide…

Q: . If a capital budgeting project’s cash flows are not normal, the internal rate of return (IRR)…

A: SOLUTION- INTERNAL RATE OF RETURN- IT IS A DISCOUNT RATE THAT MAKES THE NET PRESENT VALUE OF ALL…

Q: a. Explain how discounted cash flow (DCF) works and how it relates to simple summation of future…

A: “Since you have posted multiple questions, we will provide the solution only to the first question…

Q: There Is no correlation between net present value and Internal rate of return. A project with a…

A: Net present value that is NPV difference between present value of cash flow and initial investment.…

Q: Suppose an investment has conventional cash flows with positive NPv. How would it impact your…

A: NPV is the net present value of a project. When the net present value of a project is positive in…

Q: True or False  A project will have multiple internal rates of return if its future net cash flows…

A: Internal rate of return (IRR) is the annual rate of return which is anticipated from the cash flows.…

Q: greater than the discount r als 0, then the projects init

A: Net Present Value ("NPV"), Internal Rate of Return ("IRR") and Profitability Index ("PI") are all…

Q: need answer step by step

A: The correct answer is D. If the NPV of the project is positive, the IRR must be higher than the…

Q: Suppose a project has an IRR below the cost of capital. What can you say about the project's NPV? O…

A: The net present value (NPV) is found by subtracting a projects initial investment from the present…

Q: Question 1   Which one of the following statements is NOT correct?     Group of answer choices   If…

A: Capital budgeting is a technique to estimate the profitability of the projects. There are various…

Q: following a. The IRR is the discount rate that equates the present value of a project's expected…

A: IRR internal rate of return is minimum break even rate at which cost of capital equal to rate of…

Q: For a typical project evaluation with initial investment at time=0 and positive cash flows…

A: Net Present Value is used to analyze the profitability of a projected investment and it is defined…

Q: 2.When comparing two projects with different lives, why do you compute an annuity with an equivalent…

A: Net present value (NPV) is the difference between the present value of cash inflows and the present…

Q: Select the Incorrect statement concerning the present value index (PVI). Multiple Choice The PVI is…

A: Present value index or profitability index :-  It is ratio of total present value of cash inflows to…

Q: The Modified IRR method is   a. Exactly the same as the IRR.   b. A better measure than the NPV.…

A: IRR is the rate at which NPV of the project is zero

Q: The IRR evaluation method assumes that cash flows from the project are reinvested at the same rate…

A: MIRR refers to modified internal rate of return. MIRR, as a capital budgeting tool, seeks to remove…

Q: . If NPV is negative, company usually rejects the project. While, if ARR is greater than cost of…

A: Capital budgeting comes under the domain of corporate finance. The accounting and finance principal…

Q: A project's present value can be decreased by, I. decreasing the required discount rate (required…

A: There are various reasons for decreasing the present value of the project some of them are as…

Q: nvolving an initial investment of x0 at time zero and a constant stream of cash flows x > 0 in all…

A: Explanation of concept Net Present Value method of capital budgeting Where Initial Investment made…

Q: If you have a project combined with above-average market risk, which one of the following decisions…

A: WACC is the average rate cost of capital calculated by multiplying the cost of funds by its weight.…

Q: Which of the above statements are correct?

A: Net Present Value: It is the present value of the annual cash flows and the initial cost of the…

Q: Assume a project has a discounted payback that equals the project's life. The project's sales…

A: If a project's discounted payback period equals the project's life, it signifies that projest cash…

Q: Debt service coverage ratio (DSCR) is a measure used to determine the project's ability to cover its…

A: Debt service coverage ratio (DSCR) is a measure used to determine the project's ability to cover its…

Q: Which of the following is true? Discounted Payback Period is by definition longer than the…

A: The longer it takes to recover the cost of capital investment, the longer it will take for the…

Q: When the present value of the cash inflows exceeds the initial cost of a project, then the project…

A: If present value of cash inflows exceeds the initial cost of a project, then NPV of the project will…

Q: calculates that a project with conventional cash flows and a required return of 14% has a negative…

A: Internal rate of return when net present value is zero that means present value of cash flow is…

Q: The internal rate of return is the: discount rate that makes present value of cash inflows equal to…

A: The internal rate of return (IRR) is a capital budgeting metric used to gauge the benefit of…

Q: entify if each of the following would be included or excluded in forecasting cash flows for a…

A: When forecasting future cash flows only those cash flows, which will incur in future [ incremental ]…

Q: Suppose an investment has conventional cash flows with positive NPV. how would it impact your…

A: Conventional cash flow is a cash flow in which an investment or project has an initial cash outflow…

Q: 3. In a comparison of the NPV and IRR techniques, which of the following is true? statements A. Both…

A: In this question, we are required to determine the correct statement regarding NPV and IRR.

Q: The AW of a project can be estimated by reducing all cash flows including the capital investment,…

A: Annual worth is the equivalent annual value for the cash flows for the given investment project.

Q: One of the benefit of the pay back period is that it focuses on the timing of the project`s benefits…

A: Payback period is a time taken to recover initial investment

Q: Mathematically, we can determine the rate of return for a given project’s cash flow series by…

A: When Cash Flows are discounted by using Internal Rate of Return for a period of cash flows held.…

Q: This is a multiple choice question.

A: There are annual cash flow from projects all discounting method uses all cash flow generally.

Q: Which of the following statements is CORRECT? Assume that the project being considered has normal…

A: Internal Rate-of-Return is discount rate that makes NPV(Net Present Value) zero for an investment…

Q: A project is economically feasible if: O a. ts future worth is less than zero O b. its annual worth…

A: Future worth is the sum of future value of cash flows. Annual worth is the equivalent annual cash…

Q: A project's internal rate of return (IRR) is the discount rate ✓ ✔ that forces the PV of its inflows…

A: The IRR is the investment discount rate that corresponds to the difference between the original…

Q: Which of the following statements is CORRECT?

A: Net Present Value (NPV) Net Present Value method is a discounting cash flow technique used in…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.