The level of detail in a model should not depend on the application. For example, for regular work you may forecast depreciation using a growth rate, a percentage of sales, or PP&E. Choices: True or False
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Q24. The level of detail in a model should not depend on the application. For example, for regular work you may
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- 1. Which machine should be selected using the Payback period method? Machine AMachine B 2. Which machine should be selected using the Accounting rate of return based on the net investment method? Machine AMachine B 3. Which machine should be selected using the Internal rate of return method? Machine AMachine B6. Use Excel, Calculator, and Formula. Show your work. Based on the data below, estimate the following: E(r) = [Probability of Economic State x Return in Economic State 0² (r) = [[Return in State; - E(r)]³ x Probability of State; a. Estimate the expected return and risk of Asset A (TESLA) b. Estimate the Expected Return and risk of Asset B (APPLE) c. Estimate the Expected return and risk of a 60A and 40B portfolio d. Summarize your results and determine whether the Portfolio Diversification helped decrease the investment risk. Explain your answer. State of the Economy Probability of Economic State S Pr 1 N 0.6 Return In Economic State TESLA APPLE R R 0.27 -0.10 -0.15 0.351. Which machine should be selected using the Payback period method? 2. Which machine should be selected using the Accounting rate of return based on the net investment method? 3. Which machine should be selected using the Internal rate of return method? 4.Which machine should be selected using the Net present value, (cost of capital = 10%) method? 5.Which machine should be selected using the Net present value, (cost of capital = 12%) method?
- How do you solve the Annual Worth (AW) of A & B manually? without using exceln 0 1 2 3 4 5 6 7 8 9 10 A -$250 $60 $970 B -$200 $90 $90 $60 $60 Net Cashflow с -$70 $20 $10 $5 -$50 $60 $50 $40 $30 $20 $10 D -$300 $270 $250 -$129 -$20 $120 $40 E -$90 -$100 -$50 $0 $150 $150 $100 $1001. The Net Present Value decision technique may not be the only pertinent unit of measure if the firm is facing A. a labor union. B. a major investment. C. time or resource constraints. D. the election of a new board of directors. 2. Which rate-based decision statistic measures the rate of return, including the cost of capital for a project? A. Profitability Index, PI B. Net Present Value, NPV C. Internal Rate of Return, IRR D. Modified Internal Rate of Return, MIRR 3. When looking at these types of projects, one must consider any cash flows that arise from installing the new equipment. A. new B. cost-cutting C. incremental D. replacement E. all of the above. 4. Of the capital budgeting techniques discussed, which works equally well with normal and non-normal cash flows and with independent and mutually exclusive project? A. payback period B. net present value C. discounted payback period D. modified internal rate of return 5. The approach to convert an infinite series of asset…
- __________ considers the impact of changing one or more inputs or assumptions on the resulting answer (output) of an analysis. a.Sensitivity analysis b.Capital rationing c.Expected value analysis d.The net present value methodMatch each term with the best definition or descriptor. NPV is __________ ( a unitless ratio, a unit of time, a dollar vallue, or a rate of return). IRR is ___________ ( a unitless ratio, a unit of time, a dollar vallue, or a rate of return). Profitability index is __________( a unitless ratio, a unit of time, a dollar vallue, or a rate of return).(1) Compute the payback period. 1b) Compute the accounting rate of return for this equipment.
- Which of the following is not an advantage of the average rate of return method? a.includes the amount of income earned over the entire life of the proposal b.takes into consideration the time value of money c.emphasizes accounting income d.easy to useIndicate how the internal rate of return is calculated using the factor. (answer is in % format) Please don't give solution in an image format thank uWhich of the following correctly orders the investment rules of average accounting return (AR), internal rate of return (IRR), and net present value (NPV) from the most desirable to the least desirable? a. IRR, AR, NPV. b. AR, IRR, NPV. c. NPV, AR, IRR. d. AR, NPV, IRR. e. NPV, IRR, AR.