Answer:
b. NPV < 0
Explanation:
The internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested.
The decision rule is invest if IRR > required rate of return and don't invest if IRR < required rate of return.
The net present value is the present value of after tax cash flows from an investment less the amount invested.
The decision rule is invest if NPV > 0 and don't invest otherwise.
The payback period measures how long it takes to recover the amount invested in a project from its cumulative cash flows.
There is no set acceptable pay back period. It is usually set at the discretion of firms.
The profitability index is the present value of a projects cash flows divided by the cost of investment.
The decision rule is invest if PI > 1 and don't if its otherwise.
For a project where the initial cash flow is negative and where all subsequent cash flows are positive, the NPV and IRR would agree.
From the question the IRR is less than the required rate of return which means the project shouldn't be embarked on. When the NPV is calculated, the same conclusion should be reached. So, the npv should be less than zero.
I hope my answer helps you
Answer: i believe this is true
Explanation:
Answer:
The question is missing stock quotes which are found in the attached.
The maximum price that Norman Pilbarra will pay to buy 400 shares is $103.8 per share.
Explanation:
Judging from the attached stock quotes,the first 200 shares offered for sale is $103.5 per share while the next 200 shares is at a price of $103.8.
This then means that the maximum price for 200 shares is $103.8.This information is derived from the ask prices not bid prices since ask price is for sale,whereas bid is for purchase.
Answer:
it is true because that just makes sense to me
Answer:
$93,000
Explanation:
Data provided in the question:
selling cost of the property = $350,000
Earnest money paid = $12,000
Percentage of loan obtained = 70%
Now,
The amount of loan obtained = 70% of $350,000
= $245,000
Therefore,
Amount to be paid by self
= selling cost of the property - amount of loan obtained
= $350,000 - $245,000
= $105,000
Thus,
Additional cash the buyer will have to bring to the closing day
= Amount to be paid by self - Earnest money paid
= $105,000 - $12,000
= $93,000