Suppose you determine that the NPV of a project is $1,525,855. What does that mean?
A. The project would add value to the firm.
B. In all cases, investing in this project would be better than investing in a project that has an NPV of $850,000.
C. Under all conditions, the project’s payback would be less than the profitability index.
D. The project’s IRR would have to be less that the firm’s discount rate.Weegy:
C. In all cases, investing in this project would be better than investing in a project that has an NPV of $850,000Auto answered|Score .9962|bernanrd98|Points 80|User:
At what rate must $400 be compounded annually for it to grow to $716.40 in 10 years?
$400 must be invested at a rate of 6% compounded annually for it to grow to $716.40 in ten years. The answer is A. 6%Auto answered|Score .9528User:
Your company is considering an investment in a project which would require an initial outlay of $300,000 and produce expected cash flows in Years 1 through 5 of $87,385 per year. You have determined that the current after-tax cost of the firm’s capital (required rate of return) for each source of financing is as follows:
Cost of debt 8%
Cost of preferred stock 12%
Cost of common stock 16%
Long-term debt currently makes up 20% of the capital structure, preferred stock 10%, and common stock 70%. What is the net present value of this project?
All Categories|No Subcategories|Not Answered|5/6/2013 1:46:19 PM