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| Teaching Since: | May 2017 |
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| Questions Answered: | 27237 |
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MCS,MBA(IT), Pursuing PHD
Devry University
Sep-2004 - Aug-2010
Assistant Financial Analyst
NatSteel Holdings Pte Ltd
Aug-2007 - Jul-2017
1. A company is considering a proposal that requires an initial investment of $91,100, has predicted net cash inflows of $30,000 per year for four years and no salvage value. Â At a discount rate of 10 percent the projects net present value is...Â
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2. Which of the following most accurately describes the term annuity?
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a single cash flow that occurs at some future point in time |
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a series of equal, consecutive cash flows over time |
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an installment loan with lump sum payments |
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an investment that grows over time  |
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3. Given the following information and assuming a 10% discount rate, calculate the Net Present Value of the proposal.
Initial Investment            ( $50,000)
Operating net cash flows:
    Year 1                 $23,000
    Year 2                 $25,000
    Year 3                 $21,000
Disinvestment (year 3) Â Â Â Â Â Â Â Â Â Â $500
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4.Â
Which of the following capital budgeting tools is most effective in comparing two acceptable projects?
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Payback Period |
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Net Present Value (NPV) |
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Future Value |
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Profitability Index (PI) |
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5. If the present value of net cash inflows of a project is $1,775,424 and the investment in the project is $1,467,293.What is the profitability index?
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