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Capital Budgeting Models Statements

Which one of the following is FALSE for a project whose NPV equals zero?

Answer
The project earns more than the required return.
The projects cash outflows are equal to the present value of the cash inflows.
The project will have no impact on firm value.
The IRR is equal to the required rate of return

"Your company is considering a project with the following cash flows: an immediate investment of $105,000 and cash inflows of $30,000 for 5 years (starting in year 1). If your discount rate for this project is 7%, what is the project's NPV?"

Answer
"$228,006 "
"$18,006 "
"$123,006 "
"$45,000 "

Solution Preview

Which one of the following is FALSE for a project whose NPV equals zero?

Answer : The project earns more than the required ...

Solution Summary

Solution determines the most appropriate option in the given cases.

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