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61.
You are considering two mutually exclusive projects with the following cash
flows. Which project(s) should you accept if the discount rate is 8.5
percent? What if the discount rate is 13 percent?
62.
Day Interiors is considering a project with the following cash flows. What is
the IRR of this project?
63.
An investment has the following cash flows and a required return of 13
percent. Based on IRR, should this project be accepted? Why or why not?
64.
You are considering two independent projects with the following cash flows.
The required return for both projects is 16 percent. Given this information,
which one of the following statements is correct?
65.
You are considering an investment with the following cash flows. If the
required rate of return for this investment is 15.5 percent, should you accept
the investment based solely on the internal rate of return rule? Why or why
not?
66.
Blue Water Systems is analyzing a project with the following cash flows.
Should this project be accepted based on the discounting approach to the
modified internal rate of return if the discount rate is 14 percent? Why or
why not?
67.
Sheakley Industries is considering expanding its current line of business
and has developed the following expected cash flows for the project. Should
this project be accepted based on the discounting approach to the modified
internal rate of return if the discount rate is 13.4 percent? Why or why not?
68.
Cool Water Drinks is considering a proposed project with the following cash
flows. Should this project be accepted based on the combined approach to
the modified internal rate of return if both the discount rate and the
reinvestment rate are 12.6 percent? Why or why not?
69.
Home Décor & More is considering a proposed project with the following
cash flows. Should this project be accepted based on the combination
approach to the modified internal rate of return if both the discount rate and
the reinvestment rate are 16 percent? Why or why not?
70.
What is the profitability index for an investment with the following cash
flows given a 14.5 percent required return?
71.
Based on the profitability index rule, should a project with the following
cash flows be accepted if the discount rate is 14 percent? Why or why not?
72.
You are considering two independent projects both of which have been
assigned a discount rate of 15 percent. Based on the profitability index,
what is your recommendation concerning these projects?
73.
You would like to invest in the following project.
Sis, your boss, insists that only projects returning at least $1.06 in today's
dollars for every $1 invested can be accepted. She also insists on applying a
14 percent discount rate to all cash flows. Based on these criteria, you
should:
74.
It will cost $6,000 to acquire an ice cream cart. Cart sales are expected to
be $3,600 a year for three years. After the three years, the cart is expected
to be worthless as the expected life of the refrigeration unit is only three
years. What is the payback period?
75.
You are considering a project with an initial cost of $7,500. What is the
payback period for this project if the cash inflows are $1,100, $1,640,
$3,800, and $4,500 a year over the next four years, respectively?
76.
A project has an initial cost of $6,500. The cash inflows are $900, $2,200,
$3,600, and $4,100 over the next four years, respectively. What is the
payback period?
