CMA（P2）——Investment Decision
信息来源：金融范 2014-10-15 10:13 knroman
| |
|
Project A |
Project B |
| Investment |
|
$100,000 |
$150,000 |
| Net cash inflow |
Year 1 |
$40,000 |
$80,000 |
| |
Year 2 |
$50,000 |
$70,000 |
| |
Year 3 |
$60,000 |
$60,000 |
All cash flows are received at the end of the year. Based on this information, which one of the following statements is not correct?
A. The net present value of Project A at a cost of capital of 10% is $22,720.
B. The net present value of Project B at a cost of capital of 12% is $19,950.
C. The internal rate of return of Project B is greater than the internal rate of return of Project A.
D. The payback years for Project A is greater than the payback years for Project B.
D.5.1. Parker Industries is analyzing a $200,000 equipment investment to produce a new product for the next 5 years. A study of expected annual after-tax cash flows from the project produced the following data.
| Annual after-tax cash flow |
Probability |
| 45000 |
10% |
| 50000 |
20% |
| 55000 |
30% |
| 60000 |
20% |
| 65000 |
10% |
| 70000 |
10% |
If Parker utilizes a 14% hurdle rate, the probability of achieving a positive net present value is
A. 20%.
B. 30%.
C. 40%.
D. 60%.
D.5.2. What is a primary caution when using a company’s cost of capital as the discount rate to evaluate a capital project?
A. Evaluation typically rejects high-risk projects
B. The cost of capital may need to be risk-adjusted
C. Low-risk projects are favored
D. Opportunity costs can be distorted
关键词:
Investment Decision