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| Question | Answer |
|---|---|
| Question | 2.36 |
| Quetion | The net present value method (NPV) is generally regarded by academics as being the best single method for evaluating capital budgeting projects. |
| Question | 16.56% |
| Conflicts between two mutually exclusive projects occasionally occur, where the NPV method ranks one project higher but the IRR method puts the other one first. In theory, such conflicts should be resolved in favor of the project with the higher IRR | False |
| A increase in the firm’s WACC will decrease project’s NPV’s which could change the accept/reject decision for any potential project- However, such a damage would have no impact on project’s I | False |
| The NPV and IRR methods, when used to evaluate two independent an equally risky projects, will lead to different accept/reject decisions | False |
| If the building could be sold, then the after-tax proceeds that would be generated by any such sale should be charged as a cost to any new project that would use it. | |
| A firm has spent $2 milion on research and development associated with a new product. These costs have been expensed for tax purposes, and they cannot be recovered regardless of whether the new project is accepted or rejected. | |
| $212,750 | |
| $-73,858.25 |
Created by:
Juans