Home / Questions / Consider the following list of projects: Project Investment NPV A 135,000 6,000 B
Consider the following list of projects:
Project |
Investment |
NPV |
A |
135,000 |
6,000 |
B |
200,000 |
30,000 |
C |
125,000 |
20,000 |
D |
150,000 |
2,000 |
E |
175,000 |
10,000 |
F |
75,000 |
10,000 |
G |
80,000 |
9,000 |
H |
200,000 |
20,000 |
I |
50,000 |
4,000 |
2. Assuming that your capital is constrained, so that you only have $600,000 available to invest in projects, which projects should you invest in and in what order?
a. CBFH
b. CBGF
c. BCFG
d. CBFG
Multiple choice:
3. Which of the following statements is FALSE?
a. Because value is lost when a resource is used by another project, we should include the opportunity cost as an incremental cost of the project.
b. Sunk costs are incremental with respect to the current decision regarding the project and should be included in its analysis.
c. Overhead expenses are associated with activities that are not directly attributable to a single business activity but instead affect many different areas of the corporation.
d. When computing the incremental earnings of an investment decision, we should include all changes between the firm's earnings with the project versus without the project.
4. Which of the following statements is FALSE?
a. Many projects use a resource that the company already owns.
b. When evaluating a capital budgeting decision, we generally include interest expense.
c. Only include as incremental expenses in your capital budgeting analysis the additional overhead expenses that arise because of the decision to take on the project.
d. As a practical matter, to derive the forecasted cash flows of a project, financial managers often begin by forecasting earnings.
5. Which of the following cash flows are relevant incremental cash flows for a project that you are currently considering investing in?
a. The tax savings brought about by the project's depreciation expense
b. The cost of a marketing survey you conducted to determine demand for the proposed project
c. Interest payments on debt used to finance the project
d. Research and Development expenditures you have made
6. An exploration of the effect on NPV of changing multiple project parameters is called:
a. scenario analysis.
b. IRR analysis.
c. accounting break-even analysis.
d. sensitivity analysis.
Thanks!!
Dec 03 2019 Read more Less More
There are three means of assessing internal labor supply. They are: (i) skills inventory, (ii)replacement planning and (iii) succession planning. Which of the following d...
Dec 11 2017If employees no longer want the union to represent them, they may petition the NLRB for which of the following?A. DecertificationB. DeauthorizationC. Contract barD. Statutory bar
May 28 20201. Suppose you wanted to drill a 1.5-in.-diameter hole through a piece of 1020 cold-rolled steel that is 2 in. thick, using an indexable insert drill. What values of feed...
May 19 2020Which property of transaction ensures that either all operations of the transaction are reflected properly in the database or none are? (a) Atomicity ...
Jan 03 2018Which of the following can be utilized to set off any loss on revaluation? (A) Capital reserve (B) General reserve (C) Revaluation reserve (D) None of the given options
Apr 11 2018Please answer the following questionIf Opening inventory of Raw Material 20000Closing inventory of Raw Material ...
Apr 30 2018USA today ran a report about a university of North carolina poll of 1248 people from the the southern united states. in which they asked if they believe elvis presley is ...
Apr 10 2020Sustainable Manufacturing Answer all Questions This section contains long answer questions relating to sustainable manufacturing. Question No: 5 (15 Marks) Using suitable...
Aug 19 2020Discuss the Difference Between an Exploratory Analysis and a ConfirmatoryThe initial posting should be: 250-word minimum At least one reference 9the course textbook mus...
Mar 19 2020Consider four alternatives, each of which has an 8-year useful life: Initial cost Annual benefit Salvage Value $100 $12.20 $75.00 $80 $12.00 $50.00 $60 $9.70 $50.00 $50 $...
Apr 30 2020Welcome to MyCourseHelp Services, World's leading Academic solutions provider with Millions of Happy Students.