Author Question: For the net present value (NPV) criteria, a project is acceptable if NPV is ________, while for the ... (Read 90 times)

joesmith1212 · **on:** Jul 10, 2018

For the net present value (NPV) criteria, a project is acceptable if NPV is ________, while for the
profitability index a project is acceptable if PI is ________.

A) greater than or equal to zero; greater than or equal to one
B) greater than or equal to zero; greater than zero
C) greater than zero; greater than the required return
D) greater than one; greater than or equal to one

Question 2

A new project is expected to generate 800,000 in revenues, 250,000 in cash operating expenses,
and depreciation expense of 150,000 in each year of its 10-year life. The corporation's tax rate is
35.

The project will require an increase in net working capital of 85,000 in year one and a
decrease in net working capital of 75,000 in year ten. What is the free cash flow from the project in
year one?
A) 380,000 B) 298,000 C) 375,000 D) 410,000

poopface · **Reply #1 on:** Jul 10, 2018

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