Discounted payback period - Study guides, Class notes & Summaries

Five Key Principals of Capital Budgeting - ANSWER-1) Decisions are based on incremental cash flows. Sunk costs are not considered. 2) Cash flows are based on opportunity cost 3) Timing of the cash flows is important 4) Cash flows are analyzed on an after-tax basis 5) Financing costs are reflected in the required rate of return, not in the incremental cash flows Payback Period - ANSWER-Number of years it takes to recover the initial cost of the project. Ignores time value of money and any ...

Discounted Cash Flow - -is the total value of each year's expected cash inflow in TODAY'S DOLLARS NPV is calculated by: - -subtracting the initial investment from the total of the expected cash inflows stated in today's dollars. ex. if initial is higher than cash flows so NPV is less than zero and project should be rejected Negotiating involves... - -obtaining mutually acceptable agreements with individuals or groups Leadership involves... - -imparting a vision and motivating others to a...

BFIN 300 Final Review Exam Questions With 100% Correct Answers Net Present Value (NPV) - answerthe sum of the present values of expected future cash flows from an investment, minus the cost of that investment. If NPV is negative you will reject the investment Payback Period Rule - answeran investment is acceptable if its calculated payback period is less than some pre-specified number of years Discounted Payback Period - answerthe length of time required for an investment's discounted c...

Project+ (PK0-004) Exam Practice Questions and Answers Benefit measurement methods - Correct Answer️️ -Decision model that compares the benefits obtained from new project requests by evaluating them using the same criteria and comparing the results. Constrained optimization models - Correct Answer️️ -Decision models that use statistics and other mathematical concepts to assess a proposed project. Cost-benefit analysis - Correct Answer️️ -benefit measurement. Calculates the cos...

Net Present Value Definition - Answer-Incremental or marginal net value created by undertaking a project Net Present Value Decision Rule - Answer-1) If the NPV is positive, accept the project 2) Most reliable method to compare and evaluate projects A positive NPV is expected to..? - Answer-* add value to the firm, and therefore increase the wealth of the owners * NPV directly measures the increase in value to the firm Advantages to using the payback period approach? - Answer-1) Easy t...

What is a fixed cost? - Answer A cost that remains the same over a given period of time irrespective of output/production changes e.g. rent, rates, step fixed costs. What is a variable cost? - Answer Refers to a constant amount per unit of output/production e.g. changes in proportion to the volume of output; materials used in production. (May change depending on departmental viewpoint) What is a semi-variable cost? - Answer Costs comprising both fixed and variable components e.g. phone ...

Certified General Appraiser Exam - Questions with Verified Answers Estimated income property values will decline as a result of a. Increased net cash flows b. Lower capitalization rates c. Lower vacancy rates d. Increased discount rates e. Higher standard of living Income capitalization is the term used to described the process of estimating the value of income property by studying expected future income. This process a. Converts the net operating income of a property into its equivalent capit...

Discounted Cash Flow - is the total value of each year's expected cash inflow in TODAY'S DOLLARS NPV is calculated by: - subtracting the initial investment from the total of the expected cash inflows stated in today's dollars. ex. if initial is higher than cash flows so NPV is less than zero and project should be rejected Negotiating involves... - obtaining mutually acceptable agreements with individuals or groups Leadership involves... - imparting a vision and motivating others to achie...

The market risk premium is - correct answer the difference between the return on the market and the risk-free rate of return. Which one of the flowing risks of a stock is not likely to be an unsystematic, diversifiable risk? A. The risk that the founder and CEO retires B. The risk that a product design is faulty, and the product must be recalled C. The risk that your best employees will be hired away D. The risk that the new product you expect your R&D...

Fin 480 test practice Exam Questions And Answers 100% Verified A firm has sales of $1,310, net income of $241, net fixed assets of $501, and current assets of $301. The firm has $97 in inventory. What is the common-size statement value of inventory? 12.1 percent - answer12.1 percent Common-size inventory = $97/($501 + $301) = 12.1 percent What is the quick ratio for 2009? - answer.80 Quick ratio for 2009 = ($2,450 - $1,530)/$1,150 = 0.8 What is the debt-equity ratio for 2009? - answer.38...