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 |

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% |

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 |

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% |

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 |

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. |

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. |

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 |

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. |

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