When faced with a set of independent projects, one should select (choose the best answer) O all projects with an IRR greater than the hurdle rate O all projects with a positive NPV O all projects with a PI greater than one. O all projects with a positive NPV or an IRR greater than the hurdle rate. O all projects with an IRR greater than the hurdle rate or a Pl greater than one. O all projects with a positive NPV or a PI greater than the one. O all projects with a positive NPV or an IRR greater than the hurdle rate or a Pl greater than one.

When faced with a set of independent projects, one should select (choose the best answer) O all projects with an IRR greater than the hurdle rate O all projects with a positive NPV O all projects with a PI greater than one. O all projects with a positive NPV or an IRR greater than the hurdle rate. O all projects with an IRR greater than the hurdle rate or a Pl greater than one. O all projects with a positive NPV or a PI greater than the one. O all projects with a positive NPV or an IRR greater than the hurdle rate or a Pl greater than one.

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter10: The Basics Of Capital Budgeting: Evaluating Cash Flows

Section10.5: Modified Internal Rate Of Return (mirr)

Problem 3ST

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When faced with a set of independent projects, one should select (choose the best answer) O all projects with a positive NPV or an IRR greater than the hurdle rate. O all projects with an IRR greater than the hurdle rate O all projects with a positive NPV O all projects with a positive NPV or an IRR greater than the hurdle rate or a PI greater than one. O all projects with a positive NPV or a PI greater than the one. O all projects with a Pl greater than one. O all projects with an IRR greater than the hurdle rate or a Pl greater than one.
29....When using the NPV method the decision making rationale includes the following (select all that apply): a.If projects are mutually exclusive, accept the project with the highest positive NPV. b.If projects are independent, accept if the project NPV<0. c.If projects are independent, accept if the project NPV>0 d.If the projects are mutually exclusive, accept the project with lowest NPV.
When faced with a set of independent projects, one should select (choose the best answer) A. all projects with a positive NPV or an IRR greater than the hurdle rate or a PI greater than one. B. all projects with a PI greater than one. C. all projects with an IRR greater than the hurdle rate D. all projects with a positive NPV or an IRR greater than the hurdle rate. E. all projects with a positive NPV or a PI greater than the one. F. all projects with a positive NPV G. all projects with an IRR greater than the hurdle rate or a Pl greater than one.
When faced with a set of independent projects, one should select (choose the best answer) all projects with a positive NPV or an IRR greater than the hurdle rate or a Pl greater than one. all projects with a positive NPV all projects with an IRR greater than the hurdle rate or a Pl greater than one. all projects with a positive NPV or an IRR greater than the hurdle rate. all projects with an IRR greater than the hurdle rate all projects with a positive NPV or a Pl greater than the one. all projects with a Pl greater than one.
When faced with a set of independent projects, one should select (choose the best answer) a. all projects with a positive NPV or an IRR greater than the hurdle rate or a PI greater than one. b. all projects with a positive NPV or an IRR greater than the hurdle rate. c. all projects with an IRR greater than the hurdle rate d. all projects with an IRR greater than the hurdle rate or a PI greater than one. e. all projects with a positive NPV f. all projects with a positive NPV or a PI greater than the one. g. all projects with a PI greater than one.
Which project below would you consider acceptable? One whose IRR is greater than the MARR One whose MARR is greater than the IRR O One whose RIC is less than the MARR One whose MARR is greater than the MIRR
a. Explain why the IRR may contradict the ranking of NPV and therfore not recmmeneded to use when choosing among mutually exclusive projects.\ (5 lines) b. Give two possible examples of such projects. (choose realistic projects, or actual projects you know of) Exaplain your choice?
b) Using data provided below, compute appropriate values and fill the table below to help identify the least risky and most risky project among alternatives A, B and C using appropriate criteria. Project EV D D2 Var St. dev Coef.0f Var TT 12 0.2 A 18 0.7 28 0.1 10 0.3 В 22 0.6 32 0.1 11 0.1 C 21 0.8 31 0.1 Where n denotes the profit, P is the probability, EV stand for Expected value, D is the Deviation, D$ denote the deviation square, St. dev is the standard deviation and finally Coef.of Var is the coefficient of variation.
Calculate the NPVs of both Project X and Project Y. Show the NPVs for each project. If the Projects are Independent which would you approve? If the Projects are Mutually Exclusive which would you approve?
Do NPV and IRR always yield the same conclusion (accept or reject a project)? If not, when do they not yield the same conclusion? Short Answer Toolbar navigation BIUS A
Which technique would you prefer out of NPV and IRR if the projects were independent projects and why? ( 300 words)
How do you apply the Net Present Value rule when multiple projects are available and you have the added constraint of accepting only one project?