# FIN 571 Week 5 Connect Lab Latest 2016 Version

Jun 19th, 2016
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1. The difference between the present value of an investment?s future cash flows and its initial cost is the 2. Which statement concerning the net present value (NPV) of an investment or a financing project is correct? 3. The primary reason that company projects with positive net present values are considered acceptable is that: 4. Accepting a positive net present value (NPV) project: 5. The net present value method of capital budgeting analysis does all of the following except: 6. What is the net present value of a project with an initial cost of \$36,900 and cash inflows of \$13,400, \$21,600, and \$10,000 for Years 1 to 3, respectively? The discount rate is 13 percent. 7. Year Project A Project B 0 –\$17,000 –\$20,000 1 10,500 11,500 2 7,000 8,000 3 2,600 7,000 a1. Calculate the payback period for each project a2. Which, if either, of these projects should be chosen? b1. What is the NPV for each project if the appropriate discount rate is 15 percent? b2. Which, if either

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1. The difference between the present value of an investment?s future cash flows and itsinitial cost is thenet present value.2. Which statement concerning the net present value (NPV) of an investment or a financingproject is correct?Any type of project should be accepted if the NPV is positive and rejected if it isnegative.3. The primary reason that company projects with positive net present values are consideredacceptable is that:they create value for the owners of the firm.4. Accepting a positive net present value (NPV) project:is expected to increase the stockholders value by the amount of the NPV.5. The net present value method of capital budgeting analysis does all of the followingexcept:provide a specific anticipated rate of return.6. What is the net present value of a project with an initial cost of \$36,900 and cash inflowsof \$13,400, \$21,600, and \$10,000 for Year

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