Questions from Corporate Finance

Q: In January 2008, automobile manufacturer Volkswagen announced plans to build an

In January 2008, automobile manufacturer Volkswagen announced plans to build an automatic transmission and engine plant in South Carolina. Volkswagen apparently felt that it would be better able to co...

Q: It is sometimes stated that “the net present value approach assumes

It is sometimes stated that “the net present value approach assumes reinvestment of the intermediate cash flows at the required return.” Is this claim correct? To answer, suppose you calculate the NPV...

Q: Concerning payback: a. Describe how the payback period is

Concerning payback: a. Describe how the payback period is calculated, and describe the information this measure provides about a sequence of cash flows. What is the payback criterion decision rule? b....

Q: Concerning discounted payback: a. Describe how the discounted payback

Concerning discounted payback: a. Describe how the discounted payback period is calculated, and describe the information this measure provides about a sequence of cash flows. What is the discounted pa...

Q: Concerning AAR: a. Describe how the average accounting return

Concerning AAR: a. Describe how the average accounting return is usually calculated, and describe the information this measure provides about a sequence of cash flows. What is the AAR criterion decisi...

Q: Concerning NPV: a. Describe how NPV is calculated,

Concerning NPV: a. Describe how NPV is calculated, and describe the information this measure provides about a sequence of cash flows. What is the NPV criterion decision rule? b. Why is NPV considered...

Q: Concerning IRR: a. Describe how the IRR is calculated

Concerning IRR: a. Describe how the IRR is calculated, and describe the information this measure provides about a sequence of cash flows. What is the IRR criterion decision rule? b. What is the relati...

Q: Seth Bullock, the owner of Bullock Gold Mining, is evaluating

Seth Bullock, the owner of Bullock Gold Mining, is evaluating a new gold mine in South Dakota. Dan Dority, the company’s geologist, has just finished his analysis of the mine site. He has estimated th...

Q: What is the IRR of the following set of cash flows?

What is the IRR of the following set of cash flows? Year ……………………………… Cash Flow 0………………………………………………..−$19,500 1…………………………………………………….9,800 2…….……………………………..……………..10,300 3…………………………………………………….8,600

Q: During 2009, Raines Umbrella Corp. had sales of $730

During 2009, Raines Umbrella Corp. had sales of $730,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $580,000, $105,000, and $135,000, respectively. In add...