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Author Question: Different discounted cash flow evaluation methods may provide conflicting rankings of investment ... (Read 44 times)

sjones

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on: Jul 10, 2018
Different discounted cash flow evaluation methods may provide conflicting rankings of investment
  projects when
 
  A) the accounting policies differ.
  B) the projects are mutually exclusive.
  C) the internal rate of return equals the cost of capital.
  D) the size of investment outlays differ.

Question 2

Your company just sold a product with the following payment plan: 50,000 today, 25,000 next year, and 10,000 the following year.
 
  If your firm places the payments into an account earning 10 per year, how much money will be in the account after collecting the last payment?
  A) 99,000
  B) 98,000
  C) 88,500
  D) 85,000
Foundations of Finance ¦ Keown, Petty, Martin ¦ 9th Edition
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jamesnevil303

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

D

Answer to Question 2

Answer: B
Explanation: B) FV = 50,000  (1.10)2 + 25,000  (1.10)1 + 10,000  (1.10)0 = 98,000.


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