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Author Question: You have determined the profitability of a planned project by finding the present value of all the ... (Read 91 times)

moongchi

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on: Jul 10, 2018
You have determined the profitability of a planned project by finding the present value of all the cash flows from that project.
 
  Which of the following would cause the project to look more appealing in terms of the present value of those cash flows?
  A) The discount rate decreases.
  B) The cash flows are extended over a longer period of time, but the total amount of the cash flows remains the same.
  C) The discount rate increases.
  D) The cash flows occur over the same time period and total the same amount, but the cash flows are larger toward the end of the project.
  E) The cash flows are extended over a longer period of time and the total amount of the cash flows remains the same, but the cash flows are larger toward the end of the project.

Question 2

Suzanne has identified a project with the following cash flows. What is the present value of the cash flows at time 0 if the interest rate is 17?
 
  Year Cash Flow
  1 2,000
  2 650
  3 375
  4 1,200
 
  A) 3,058.75
  B) 3,578.74
  C) 2,614.32
  D) 4,225.00
  E) 3,521.63


kbennett34

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Reply #1 on: Jul 10, 2018
Answer to Question 1

A

Answer to Question 2

A


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