Alvaro Manufacturing is analyzing the earnings potential of an expansion into military equipment supplies. The expansion requires a $200,000 initial investment in return for $60,000 annual after-tax cash inflows for consecutive five years. Assume the cost of capital is 10%. Which of the following conclusions regarding the expansion is most likely correct? NPV IRR Decision
A. 227,447.21 16.7% Accept
B. 227,447.21 16.7% Reject
C. 27,447.21 15.24% Accept
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A Pharmaceutical Company claims to discover a new approach to diagnose an infant disease.
A. 40%.
B. 80%.
C. 60%.
Which of the following is most likely used to compare a firm’s profitability to the industry average?
A. Balance sheet
B. Income statement
C. Statement of cash flow
The Coefficient of Variation of a portfolio is 2 and the rate of the return is 15%. Suppose the risk-free rate is 4.5%, what is the Sharpe ratio of the portfolio?
A. 1.4.
B. 0.5.
C. 0.35.
The excess kurtosis of a leptokurtic distribution is:
A. positive.
B. negative.
C. zero.