Questions from Corporate Finance

Q: Why do we sometimes get multiple IRRs for a project?

Why do we sometimes get multiple IRRs for a project?

Q: What are the reinvestment rate assumptions underlying NPV and IRR?

What are the reinvestment rate assumptions underlying NPV and IRR?

Q: What is the crossover rate?

What is the crossover rate?

Q: Is the PI rule consistent with the NPV rule?

Is the PI rule consistent with the NPV rule?

Q: How does the analysis change when the lease is a financial lease

How does the analysis change when the lease is a financial lease?

Q: Michael M. specializes in buying high‐risk commercial paper;

Michael M. specializes in buying high‐risk commercial paper; his required return on these investments is 14 percent per year. He is considering buying some 60‐day paper from Collingwood Corp. with a p...

Q: Why does the initial cash outlay often exceed the purchase price of

Why does the initial cash outlay often exceed the purchase price of an asset?

Q: Explain why the valuation by components approach can save computational time and

Explain why the valuation by components approach can save computational time and still lead to the correct answer.

Q: How do taxes affect the annual cash flows and terminal cash flows

How do taxes affect the annual cash flows and terminal cash flows of an investment project?

Q: Explain how to calculate comparisons in the lease-versus-buy

Explain how to calculate comparisons in the lease-versus-buy decision when the lease in question is an operating lease.