If cashflows are discounted at____ the net present value is zero   a. Internal rate of return   O b. Wighted average cost of capital   O c. Higher payback period   O d. Any payback period

Q: If cashflows are discounted @   the net present value is     zero.   O a. RATE OF BORROWING…

A: Capital budgeting is the process by which a corporation examines potential large projects or…

Q: If the sum of the incremental cash flows is negative, what is known about the rate of return on the…

A: Incremental Analysis: The method to measure the viability of different options related to business…

Q: A conservative approach to reinvesting projected cash flows (the reinvestment assumption) would use…

A: “Hey, since there are multiple different questions posted, we will answer first question. If you…

Q: expected value of cash flow is    Options :   certain to occur most likely cash flow…

A: Expected Cash Flow:  Predicted cash flow from a project prior to the start of the project. You may…

Q: Assuming that we are not able to accurately predict cash flows , generally decreased risk is thought…

A: Cash flow at risk at risk tells us how changes in market factors can change the future cash flows.…

Q: the discount rate that equates the present value of the cash inflows with the present value of the…

A: In capital budgeting decisions calculate net present value is very important.

Q: u are given two choices of investments, Investment A and Investment B. Both investments have the…

A: Introduction: The term present value can be defined as the current value of future set of cash flows…

Q: If you disounted a set of positive real cash flows with a nominal discount rate and inflation were…

A: Justification:Suppose the positive cash flows are discounted with the inflation rate, which is…

Q: f a project's cash flows are discounted at the internal rate of return, the NPV will always be…

A: Internal rate of return is the rate at which present value of cash inflows is equal to present value…

Q: If the inflation rate is positive, the expected NPV of an investment will be:  A.understated if real…

A: The nominal discount rate will be reflection of the combination of real interest rate and the rate…

Q: Which of the following situation is better for the company? O a. All of these O b. Cash conversion…

A: The cash conversion cycle (CCC) is the days of inventory plus the days of receivable less the days…

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

A: Net Present Value is Positive of the project. Impact of these measurements on the decision of…

Q: An investment is guaranteed to have a unique value of IRR if which of the following is true? a.…

A: Given: The unique IRR value in the investment.

Q: Payback method is Select one: a. None of the options b. Yield on investment c. PV of cash inflow- PV…

A: Payback method is one of the capital budgeting technique which helps in evaluating profitability of…

Q: What is Internal Rate of Return - Monthly Fixed Cash Flows with Reversions?  Please provide…

A: The internal rate of return is the one of the discounted techniques of capital budgeting which is…

Q: The net present value: is equal to the initial investment when the internal rate of return is equal…

A: The net present value is determined by, The Net present value (NPV) is defined as the difference…

Q: oose the correct option- "This is the rate at which present value of cash inflows are equal to the…

A: Net present value or NPV is excess of present value of cash inflows over present value of cash…

Q: fe of the project. Which one of the following statements is correct with respect to this…

A: NPV Method assumes that all the cash flows are reinvested at the company's Cost of Capital. IRR…

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: According to Descartes’ rule of signs, the possible number of rate of return values for the net cash…

A: As per Descartes's rule total no. of roots is less than or equal to no. of sign change of the…

Q: An increase in the discount rate will______ O a. Reduce the present value of future cash…

A: This question can be solved with the help of 2 examples. Example 1 Initial investment=15000 Discount…

Q: The NPV method determines how much the present value of cash inflows exceeds the present value of…

A: The amount of difference between the PV (present value) of cash inflows and cash outflows is called…

Q: Label each of the following statements as either true (“T”) or false (“F”). An out-of-pocket cost…

A: Relevant costs: These costs can be defined as the costs that can be avoided if we choose over option…

Q: Which of the following statements is CORRECT?    a. The future value of an annuity table is most…

A: Time value concept is useful to evaluate any investment opportunities. One can understand what is…

Q: Explain your answer assuming that all variables are constant except for the one mentioned:

A: Capital budgeting is a method used for finding the profitability of investment proposals. This…

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: The internal rate of return method of evaluating capital investments can be used with uneven cash…

A: Uneven cash flows is a series where the cash flows are not the same throughout the project's life.…

Q: What capital budgeting rule is a simple but imperfect attempt to solve the capital rationing…

A: Answer: Option c.  Payback rule   Explanation: Payback rule is a very simple method which is used to…

Q: An investment with a positive total cash flow will always outperform an investment that shows…

A: Positive Cash flows are the annual cash inflow that has been received to the organization on yearly…

Q: When the underlying riskiness of free cash flows (FCF) decreases, the value of the project O…

A: Free cash flow refers to funds of the company which is freely available to be repaid to the…

Q: Certainty Equivalent Cash flow (CEQ) is obtained through converting the expected  cash flows by a…

A: Capital budgeting decisions are major investment decisions needs to be taken by the business. Under…

Q: a. What is the simple payback period for Alternative 1? b. What is the annual worth of Alternative…

A: As per policy we answer only 3 sub questions in a single question.  Please repost the unanswered…

Q: te

A: Introduction : The given question relates to the capital budgeting techniques which are used to…

Q: All of the following are true statements about the a gradient series of cash flow except the…

A: A gradient series is a cash flow series that either increases or decreases by a constant amount each…

Q: A graph of the discounting process shows how the present value of any sum to be received in the…

A: Present value = Future value / (1+rate)^years

Q: “The greater the discount rate, the greater the present value of a future cash flow.” True or false?…

A: Present Value: The value of today's amount expected to be paid or received in the future at a…

Q: Which figure of merit provides an interest rate at which the present value of the future cash flows…

A: IRR It is a rate at which the amount of investment equals to PV of the future CF. It is a…

Q: The profitability index O will never be greater than 1. O does not take into account the discounted…

A: The profitability index helps to compare the project. It measure the attractiveness of the project.…

Q: Which of the following statements correctly describe how the present value of a future expected cash…

A: The present value of future cash flows is the value which is derived by discounting the future cash…

Q: The principal of the time value of money is probably the single most important concept in financial…

A: Time value of money refers to decline in value of money with the passage of time due to inflation…

Q: The ____ of an investment is the period of time for the ____ to equal the initial cash outlay.   a.…

A: The payback period refers to the amount of time it takes to recover the cost of an investment.…

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

A: Since you have asked a question with multiple parts, we will only solve the first 3 parts for you.…

Q: When a capital investment is expected to provide unequal annual cash inflows, the payback period…

A: Payback period: It can be defined as the time that investment takes before it starts generating…

Q: Lowering the discount rate on a cash flow will its present value.

A: Discount Rate: It is the rate at which the cash flows over the period are discounted.

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.