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FIN 5080 Chapter 10 Quiz Problems




Question;Question;1;Calculate;the payback period for a project that requires investment of $5,400 and will;provide the cashflows of $1,200, $400, $700, $3,000 and $500 in years 1;thru 5 respectively.;Question;2;A;project has the following cash flow. What is the project's NPV?;Discount;rate;11.00%;Year;0;1;2;3;4;Cash;flows;?$1,000;$350;$350;$350;$350;Question;3;IRR;has the following drawbacks. Check all that apply. No credit if you miss or;wrongly check any option.;o IRR may lead you to a wrong;decision if you are deciding between mutually exclusive projects.;o;For;a project with conventional cashflows you may decide to take a project based;on IRR;when NPV would have led you to;reject the project.;o IRR assumes that intermediate;cashflows from a project are invested at IRR;o There may be several IRRs if;the cashflows are unconventional;o;You;may get a negative IRR;Question;4;A;project has the following cashflow. Calculate NPV.;WACC;o 9.00%;o;o;o;Year;o;0;o;1;o;2;o;3;Cash;flows;o;?$1,000;o;$500;o;$500;o;$500;Question;5;Calculate the project's IRR.;Do not write the '%' sign in your answer. If the;answer is 12.45%, you will enter 12.45;Year;0;1;2;3;4;Cash;flows;?$1,050;$400;$400;$400;$400;Question;6;A project has following cashflow. Calculate NPV;WACC;10.25%;Year;0;1;2;3;4;5;Cash;flows;?$1,000;$300;$300;$300;$300;$300;Question;7;Given the following cashflows calculate NPV.;WACC;10.00%;Year;0;1;2;3;Cash;flows;?$1,050;$450;$460;$470;Question;8;Given the following cashflows calculate payback;period.;WACC;10.00%;Year;0;1;2;3;Cash;flows;?$1,050;$450;$460;$470;Question;9;Calculate;the NPV of a project that requires investment of 937 and provides the;cashflows of 104, 232, 294, 272 in the next 4 years. The relevant discount;rate is 12%. (All numbers are in dollars);Question;10;Find the payback period for a project that;requires investment of $48 and returns $14 every years for 7 years.


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