which of the following statement is true>? 1. return on equity is the ratio of total assets to total net income 2. one must know the discount rate to compute the npv of a project but one can compute the IRR without referring to the discount rate.  3. there will always be one IRR regardless of cash flows 4. one must know the discount rate to compute the IRR of a project but one can compute the NPV without referring to the discount rate 5. payback accounts for time value of money

Q: Assume that both Projects A and B have normal cash flows, with one outflow followed by a series of…

A: IRR(Internal ROR) is the rate at which NPV(Net Present Value) of a project is zero. At IRR, PV of…

Q: A project is accepted if, Net present value of the project is positive. IRR is lower than cost of…

A: Net Present Value method is used to ascertain whether the proposal should be selected or rejected…

Q: how many of the following investment criteria always use all of a projects cash flows in their…

A: Project cash flows generally refers to cash amount which is generated from investment which ignores…

Q: Assume a project has normal cash flows. All else equal, which of the following statements is…

A: The correct answer is option (e).   The weighted average cost of capital includes the cost of…

Q: Which of the following is CORRECT? Select one: a. If the NPV of a project is negative, the IRR for…

A: NPV is a technique that helps the company to analyze the viability of the project i.e. the company…

Q: Mansi Inc. is considering a project that has the following cash flow data. What is the project's…

A: Cash flow in year 0 (CF0) = - $750 CF1 = $300 CF2 = $325 CF3 = $350

Q: We should accept a project if the Net Present Value is positive and the Internal Rate of Return is…

A: Net present value is referred as the difference between the cash inflow's present value and also…

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: Which of the following statements is correct regarding the payback method? Takes account of…

A: Payback period is a tool of capital budgeting used to evaluate projects and investments.

Q: Assume a project has normal cash flows (i.e. the initial cash flow is negative and all other cash…

A: Option B) - All else equal, a project's N.P.V increases as the cost of capital declines.

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: 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: This method solves for the interest rate that equates the equivalent worth of a project's cash…

A: Payback period -  Initial investment / Cash flow per year. It is the period taken to recover the…

Q: return

A: MIRR or the modified internal rate of return assumes that the company's cash flows can be reinvested…

Q: Two projects, A and B, are analyzed using ranking present worth analysis with MARR at i%. It is…

A: Cash flow is the amount of cash equivalent that the company gets or receives or gives out through…

Q: The best model to analyze the project financially is cash flow. Select one: O True O False

A: To evaluate a project for its acceptability, we need to analyze its profit generating ability.…

Q: The firm should accept a project if: the profitability index is greater than or equal to 1. the…

A: Capital budgeting is the process of evaluating the proposed projects and investments so that the…

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: tively rapidly will be more sensitive to changes in the discount rate than the NPV of a project…

A: Net present value is the difference between the present value of cash flow and initial investment.

Q: Consider a project with the following cash-flows: ime Cash-flow t=1 t=2 t=3 3 t=0 -10 2 What is the…

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

Q: Consider a project with the following cash-flows: Time Cash-flow t=0 t=1 t=2 t=D3 -10 2 What is the…

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

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: Which of the following is/are true for the average accounting return method of project analysis? I.…

A: Average Accounting Rate of return is used for capital budgeting decision for a project. The Average…

Q: consider the following two investments with the cashfow as shown. given the project are mutually…

A: Incremental cash flow refers to the net additional cash flows generated by accepting a new project…

Q: Net present value (NPV) is one method that can be used evaluate the financial viability of potential…

A: Data given:: Initial investment           = $ 190,000 Annual  cash flow           = $ 58,000 n…

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…

Q: What are three concerns the financial manager should be aware of when analyzing a balance sheet, &…

A: There are financial statements prepared by the company for the purpose of considering information…

Q: True or False: In solving a capital budgeting problem involving investment opportunities that are…

A: capital budgeting is the process of selection of the best project among all the projects available.…

Q: Suppose that, for a certain potential investment project, the optimistic, most likely, and…

A: Annual worth is the annual value for all estimated income and costs during the life cycle of the…

Q: Which of the following statements related to the internal rate of return (IRR) are correct? I. The…

A: All Four options are correct.

Q: ) IRR may produce multiple rates of return when cash flows are non-conventional. B) IRR is best used…

A: Internal Rate of Return(IRR) is a financial metric for cash flow analysis that compares investments…

Q: If a capital project has a hurdle rate higher than its internal rate, then its profitability index…

A: Solution Explanation- A hurdle rate is the minimum rate of return required on a project or…

Q: The relationship between NPV and IRR is such that a. both approaches always provide the same ranking…

A: IRR is the required rate of return for the project to have zero Net Present value.   Net present…

Q: Net Present Value Suppose a project has conventional cash flows and a positive NPV. What do you know…

A: Capital budgeting techniques are the methodologies adopted by the management of the company with the…

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: All else being equal, a company would choose to invest in a capital asset if which of the following…

A: Answer: If the expected accounting rate of return is greater than the required rate of return.

Q: Which TWO of the following statements are correct for a potential project with an investment…

A: Capital Budgeting techniques are used to know the profitability of the project. The NPV and the IRR…

Q: Examine the following statements. (i) Payback period method measure the true profitability of a…

A: Time value of money is a concept that helps in determining the value of future cash flows…

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.