Questions from Corporate Finance

Q: What are independent projects? What are mutually exclusive projects?

What are independent projects? What are mutually exclusive projects?

Q: For each pair of investment opportunities, indicate if they are more

For each pair of investment opportunities, indicate if they are more likely to be mutually exclusive or independent projects. Explain your choices. a. Cruise line: i. Build a cruise ship to carry 10,0...

Q: What are the practical difficulties when attempting to apply the NPV evaluation

What are the practical difficulties when attempting to apply the NPV evaluation process to foreign investments?

Q: For the following decisions, indicate whether they are examples of a

For the following decisions, indicate whether they are examples of a bottom‐up analysis or a top‐down analysis: a. Replacing the printing press at a newspaper b. A...

Q: Your truck has a market value of $60,000.

Your truck has a market value of $60,000. You can sell it to your brother, who agreed to buy it now and pay $75,000 three years from now, or you can sell it to your cousin who agreed to pay you $65,00...

Q: Explain how real option valuation (ROV) is applied.

Explain how real option valuation (ROV) is applied.

Q: You are interested in an investment where the initial investment is $

You are interested in an investment where the initial investment is $118,000 and your required cost of capital is 12 percent. Cash inflows from this project are expected to be $11,400 at the end of th...

Q: Name one condition under which the discounted payback period will be equal

Name one condition under which the discounted payback period will be equal to the payback period.

Q: Using initial cost of I 0 , and annual cash inflows of

Using initial cost of I 0 , and annual cash inflows of R over N period, express R in terms of I 0 and N such that the payback period is equal to its life.

Q: Using NPV, should you invest in a project where the initial

Using NPV, should you invest in a project where the initial cash outflow is $24,000 and the cash inflow in the first year is $1,600 and “grows” at a rate of 3 percent thereafter? Assume cost of capita...