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Homework answers / question archive / The discount rate at which the present value of a project's cash outflows is equal to the present value of the sum of its future cash inflows, assuming that cash flows are reinvested at the firm's required rate of return

The discount rate at which the present value of a project's cash outflows is equal to the present value of the sum of its future cash inflows, assuming that cash flows are reinvested at the firm's required rate of return

Finance

The discount rate at which the present value of a project's cash outflows is equal to the present value of the sum of its future cash inflows, assuming that cash flows are reinvested at the firm's required rate of return. This analytical technique is less reliable for identifying acceptable projects as it ignores the time value of money The discount rate that equates the present value of a capital project's expected cash inflows and its initial cost Also called a firm's hurdle rate, it is used as the discount rate in a firm's net present value (NPV) calculations or the basis of comparison for a project's internal rate of return (IRR). A curve showing the relationship between a projects's net present value (NPV) and various discount rates. This analysis involves a comparison of the expected and actual results for a given capital project and the development of an explanation for any disparity between them.
Capital projects are either mutually exclusive or independent. Which of the following phrases correctly describe mutually exclusive projects? Check all that apply. By definition, they are not also independent projects Project choices that rule out competing project choices Those projects that, if rejected, preclude the acceptance of all other competing projects Those projects that are best analyzed without considering the time value of money Those projects that, if accepted, preclude the acceptance of all other competing projects

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1)The discount rate at which the present value of a project's cash outflows is equal to the present value of the sum of its future cash inflows, assuming that cash flows are reinvested at the firm's required rate of return. Modified Internal Rate of Return (MIRR)

2) This analytical technique is less reliable for identifying acceptable projects as it ignores the time value of money. Payback period

3) The discount rate that equates the present value of a capital project's expected cash inflows and its initial cost. Internal rate of return

4) Also called a firm’s hurdle rate, it is used as the discount rate in a firm’s net present value (NPV) calculations or the basis of comparison for a project’s internal rate of return (IRR) Required rate of return

5)A curve showing the relationship between a project’s net present value (NPV) and various discount rates. NPV Profile

6)This analysis involves a comparison of the expected and actual results for a given capital project and the development of an explanation for any disparity between them. Post Audit Analysis

Capital projects are either mutually exclusive or independent. Which of the following phrases correctly describe mutually exclusive projects? Check all that apply

The below two options are correct here:

1) Those projects that, if accepted, preclude the acceptance of all other competing projects.

2) Project choices that rule out competing project choices

Events are considered to be mutually exclusive when they cannot happen at the same time. The time value of money is considered when deciding between two mutually exclusive project.

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