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# FIN 571 Week 5 Connect Problems

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Get the skills, knowledge & mindset with FIN 571 Week 5 Connect Problems and design your future.

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### FIN 571 Week 5 Connect Problems

1. 1. FIN 571 Week 5 Connect Problems By www.UopeTutors.com Copyright All Rights Reserved By http://www.UOPeTutors.com
2. 2. 1). The difference between the present value of an investment?s future cash ﬂows and its initial cost is the:  net present value.  internal rate of return.  payback period.  proﬁtability index.  discounted payback period. Copyright All Rights Reserved By http://www.UOPeTutors.com
3. 3. 2). Which statement concerning the net present value (NPV) of an investment or a ﬁnancing project is correct? A ﬁnancing project should be accepted if, and only if, the NPV is exactly equal to zero. An investment project should be accepted only if the NPV is equal to the initial cash ﬂow. Any type of project should be accepted if the NPV is positive and rejected if it is negative. Any type of project with greater total cash inﬂows than total cash outﬂows, should always be accepted. An investment project that has positive cash ﬂows for every time period after the initial investment should be accepted. Find the Week 1 Connect Problems answers here FIN 571 Week 1 Connect Problems Copyright All Rights Reserved By http://www.UOPeTutors.com
4. 4. 3). The primary reason that company projects with positive net present values are considered acceptable is that: they create value for the owners of the ﬁrm. the project's rate of return exceeds the rate of inﬂation. they return the initial cash outlay within three years or less. the required cash inﬂows exceed the actual cash inﬂows. the investment's cost exceeds the present value of the cash inﬂows. Copyright All Rights Reserved By http://www.UOPeTutors.com
5. 5. 4). Accepting a positive net present value (NPV) project: indicates the project will pay back within the required period of time. means the present value of the expected cash ﬂows is equal to the project’s cost. ignores the inherent risks within the project. guarantees all cash ﬂow assumptions will be realized. is expected to increase the stockholders’ value by the amount of the NPV. Week 2 Connect problems Answers just a click away FIN 571 Week 2 Connect Problems Copyright All Rights Reserved By http://www.UOPeTutors.com
6. 6. 5).The net present value method of capital budgeting analysis does all of the following except: incorporate risk into the analysis. consider all relevant cash ﬂow information. use all of a project's cash ﬂows. discount all future cash ﬂows. provide a speciﬁc anticipated rate of return. Copyright All Rights Reserved By http://www.UOPeTutors.com
7. 7. 6). What is the net present value of a project with an initial cost of \$36,900 and cash inﬂows of \$13,400, \$21,600, and \$10,000 for Years 1 to 3, respectively? The discount rate is 13 percent. −\$287.22 −\$1,195.12 −\$1,350.49 \$204.36 \$797.22 Complete Answers here FIN 571 Week 3 Connect Problems Copyright All Rights Reserved By http://www.UOPeTutors.com
8. 8. 7).Maxwell Software, Inc., has the following mutually exclusive projects. Year Project A Project B 0 –\$17,000 –\$20,000 1 10,50011,500 2 7,000 8,000 3 2,600 7,000 a-1.Calculate the payback period for each project. (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) Payback period Project A ____years Project B ____years a-2. Which, if either, of these projects should be chosen? Project __ Copyright All Rights Reserved By http://www.UOPeTutors.com
9. 9. b-1. What is the NPV for each project if the appropriate discount rate is 15 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) NPV Project A \$____ Project B \$____ b-2. Which, if either, of these projects should be chosen if the appropriate discount rate is 15 percent? Project __ Final Exam Answers just a click away FIN 571 Final Exam (Newest) Copyright All Rights Reserved By http://www.UOPeTutors.com