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93.
You are considering the following two mutually exclusive projects. Both
projects will be depreciated using straight-line depreciation to a zero book
value over the life of the project. Neither project has any salvage value.
Should you accept or reject these projects based on net present value
analysis?
94.
You are considering the following two mutually exclusive projects. Both
projects will be depreciated using straight-line depreciation to a zero book
value over the life of the project. Neither project has any salvage value.
Should you accept or reject these projects based on IRR analysis?
95.
You are considering the following two mutually exclusive projects. Both
projects will be depreciated using straight-line depreciation to a zero book
value over the life of the project. Neither project has any salvage value.
Should you accept or reject these projects based on payback analysis?
96.
You are considering the following two mutually exclusive projects. Both
projects will be depreciated using straight-line depreciation to a zero book
value over the life of the project. Neither project has any salvage value.
Should you accept or reject these projects based on the profitability index?
97.
You are considering the following two mutually exclusive projects. Both
projects will be depreciated using straight-line depreciation to a zero book
value over the life of the project. Neither project has any salvage value.
Should you accept or reject these projects based on the average accounting
return?
98.
Motor City Productions sells original automotive art on a prepaid basis as
each piece is uniquely designed to the customer's specifications. For one
project, the cash flows are estimated as follows. Based on the internal rate
of return (IRR), should this project be accepted if the required return is 9
percent?
99.
Rosa's Designer Gowns creates exquisite gowns for special occasions on a
prepaid basis only. The required return is 8 percent. Rosa has estimated the
cash flows for one gown as follows. Should Rosa sell this gown at the price
she is currently considering based on the estimated internal rate of return
(IRR)?
100.
An investment project provides cash flows of $1,190 per year for 10 years. If
the initial cost is $8,000, what is the payback period?
101.
An investment project costs $21,500 and has annual cash flows of $6,500
for 6 years. If the discount rate is 15 percent, what is the discounted
payback period?
102.
You're trying to determine whether to expand your business by building a
new manufacturing plant. The plant has an installation cost of $12 million,
which will be depreciated straight-line to zero over its 4-year life. The plant
has projected net income of $1,095,000, $902,000, $1,412,000, and
$1,724,000 over these 4 years. What is the average accounting return?
103.
A firm evaluates all of its projects by applying the IRR rule. The required
return for the following project is 21 percent. The IRR is _____ percent and
the firm should ______ the project.
