This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Projects S and L both have an initial cost of $20,000, followed by a series of positive cash ... (Read 14 times)

warrenjean01

  • Full Member
  • ***
  • Posts: 158
on: Aug 7, 2023
Projects S and L both have an initial cost of $20,000, followed by a series of positive cash inflows. Project S’s undiscounted net cash flows total $30,000, while L’s total undiscounted flows are $40,000. At a WACC of 11%, the two projects have identical NPVs. Which project’s NPV is less sensitive to changes in the WACC?

◦

Project S


◦

Project L


◦

Both projects are equally sensitive to changes in the WACC since their NPVs are equal at all costs of capital.


◦

Neither project is sensitive to changes in the discount rate, since both have NPV profiles that are horizontal.

Financial Management: Theory and Practice ¦ Brigham, Ehrhardt, Gessaroli, Nason ¦ 4th Edition
Buy Test-Bank


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by warrenjean01 on Aug 7, 2023

butterfly17

  • Full Member
  • ***
  • Posts: 186
Reply #1 on: Aug 7, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
Answer Preview
Only 58% of students answer this correctly


warrenjean01

  • Member
  • Posts: 158
Reply 2 on: Aug 7, 2023
Wow, this really help

aruss1303

  • Member
  • Posts: 314
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

« previous next »
 

Did you know?

Certain chemicals, after ingestion, can be converted by the body into cyanide. Most of these chemicals have been removed from the market, but some old nail polish remover, solvents, and plastics manufacturing solutions can contain these substances.

Did you know?

Patients should never assume they are being given the appropriate drugs. They should make sure they know which drugs are being prescribed, and always double-check that the drugs received match the prescription.

Did you know?

Astigmatism is the most common vision problem. It may accompany nearsightedness or farsightedness. It is usually caused by an irregularly shaped cornea, but sometimes it is the result of an irregularly shaped lens. Either type can be corrected by eyeglasses, contact lenses, or refractive surgery.

Did you know?

Anti-aging claims should not ever be believed. There is no supplement, medication, or any other substance that has been proven to slow or stop the aging process.

Did you know?

The liver is the only organ that has the ability to regenerate itself after certain types of damage. As much as 25% of the liver can be removed, and it will still regenerate back to its original shape and size. However, the liver cannot regenerate after severe damage caused by alcohol.

Gram positive S. pyogenes bacteria in chains. Gram positive S. pyogenes bacteria in chains.
A spark plug thread chaser is a low-cost tool that hopefully will not be used often, but is ... A spark plug thread chaser is a low-cost tool that hopefully will not be used often, but is ...
Constant velocity versus positive velocity Constant velocity versus positive velocity
Will Posting Nutritional Content in Restaurants Have a Positive Impact on the Obesity Epidemic? Will Posting Nutritional Content in Restaurants Have a Positive Impact on the Obesity Epidemic?
When operating your own business, it is wise to know your cost of capital and that of the ... When operating your own business, it is wise to know your cost of capital and that of the ...
question in cost accounting question in cost accounting
Video: Chemical Buffers - protein buffer, phosphate buffer system and bicarbonate buffer system

For a complete list of videos, visit our video library