题目内容

Which of the following statements least accurately describes the IRR and NPV methods

A. The discount rate that gives an investment an NPV of zero is the investment"s IRR.
B. If the IRR and NPV methods give conflicting decisions for mutually exclusive projects, the IRR decision should be used to select the project.
C. The NPV method assumes that a project"s cash flows will be reinvested at the cost of capital, while the IRR method assumes they will be reinvested at the IRR.

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What should an analyst recommend based on the following information for two mutually exclusive projects Project Investment at t=0 Cash Flow at t=1 IRR NPV at 10% a b -$5000 -$20000 $7000 $25000 40% 25% $1364 $2727

Accept a and reject b.
B. Reject a and accept b.
C. Accept a and b.

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Terrison Inc. is considering the purchase of a new material handling system for a cost of $43 million. This System is expected to generate a positive cash flow of $5 million per year in perpetuity. What is the NPV of the proposed investment if the appropriate discount rate is 7%

A. $6753582
B. $28428571
C. $34395213

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Two events are said to be independent if the occurrence of one event:

A. means that the second event cannot occur.
B. means that the second event is certain to occur.
C. does not affect the probability of the occurrence of the other event.

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What is the bank discount yield for a T-bill that is selling for $48 000, with a face of $50 000, and 270 days remaining until maturity

A. 5.3%
B. 6.7%
C. 13.4%

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