Long Term Investment Management

Question 1 (1 point)

Vance incorporated is considering investing in a project with the following expected cash flows: -124, 89, 37, 27. If Vance’s expected cost of capital is 0.10, what is the expected NPV of the project?

Your Answer:

Question 1 options:

Answer

Question 2 (1 point)

 A company invests -$100k in a new project and expects the following cash flows: Year 1 $50k, Year 2 $30k, year 3 $40k.  What is the company’s expected IRR?

Question 2 options:

10.18%
9.34%
11.15%
6.17%

Question 3 (1 point)

 Heinlein Inc is considering investing in a project with a cost of $100k. If the project is expected to produce cash flows of $50k in year 1, $134k in year 2, and $208k in year 3, what is the payback period.  

Your Answer:

Question 3 options:

Answer

Question 4 (1 point)

 Vance LLC is considering investing in the following projects.  Vance’s WACC is 9.5%.  Which of the following projects should Vance accept? More than one answer is possible. 

Question 4 options:

A. IRR 11%
B. IRR 9%
C. IRR 10%
D. IRR 8%

Question 5 (1 point)

Heinlein Inc is considering investing in a project with a cost of $100k. The project is expected to produce cash flows of $50 in year 1, 85 in year 2, and 235 in year 3. If the discount rate is 0.10 what is the discounted payback period.  

Your Answer:

Question 5 options:

Answer

Question 6 (1 point)

 Which of the following is correct?

Question 6 options:

The MIRR and the IRR methods always give the same result. 
The NPV and the IRR methods always give the same result.
The NPV and the MIRR methods always give the same result. 
The IRR and the MIRR methods always give the same result. 

Question 7 (1 point)

https://learn.umuc.edu/d2l/common/viewFile.d2lfile/Database/MTE3MjI3ODg/crossoverrate.jpg?ou=353457

Which of the following is correct?

Question 7 options:

If the cost of capital is 5% project 1 should be accepted. 
If the cost of capital is 10% project 1 should be accepted. 
If the cost of capital is 12% project 1 should be accepted. 
If the cost of capital is 5% project 2 should be accepted. 

Question 8 (1 point)

 If the Present Value of all estimated futures costs of a 10 year new investment project is 140, and the future value of all expected profits is 190, what is the projects MIRR?

Your Answer:

Question 8 options:

Answer

Question 9 (1 point)

https://learn.umuc.edu/d2l/common/viewFile.d2lfile/Database/MTE3MjI5MTc/crossoverrate.jpg?ou=353457

Which of the following statements is correct?

Question 9 options:

Project 1 has larger cash flows in later time periods than project 2. 
Project 2 has larger cash flows in later time periods than project 1. 
There is no way of telling from the graph where the cash flows take place. 
The price of long term bonds is more sensitive to interest rate changes than the price of short bonds. 

Question 10 (1 point)

 Project Salerino has the following cash flows: CF0 = -100, C01 = -150, C02 = 330, C03 = 690, C04 = -40.  What is the PV of only the costs to Salerino if the cost of capital is 0.09? 

Your Answer:

Question 10 options:

Answer

3

oSs_13666424

4

False

1

247982

405441

4

oSs_13666425

7

8

9

oSs_13666430

10

False

1

256259

412631

10

oSs_13666431