Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. this is a conceptual question that does not requir

This is a conceptual question that does not require any calculation. Consider a project which...

60.1K

Verified Solution

Question

Finance

This is a conceptual question that does not require any calculation. Consider a project which requires an investment today of $100,000, at the end of the next three years (t = 1, 2 and 3) will have a cash flow of $30,000 each year ($30,000 at t = 1, $30,000 at t = 2, and $30,000 at t = 3), and at t = 4 will have a cash flow of $X. The cost of capital is 10% per year. Which of the following statements is true?

1-The NPV method is appropriate to use for all potential values of X, but the IRR method is only appropriate to use if the X is nonnegative (i.e., greater than or equal to zero).

2-The NPV method is appropriate to use for all potential values of X, but the IRR method is only appropriate to use if X is $30,000 or more.

3-Both the NPV method and IRR methods are appropriate to use only if X is nonnegative (i.e., greater than or equal to 0).

4-Both the NPV method and IRR methods are appropriate to use only if X is $30,000 or more.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Biology
1.2K views

Discuss the general structure of the eukaryotic promoter including in your answer how a limited number...

Chemistry
1.2K views

A solution is prepared by dissolving 32.5 g of a nonvolatile solute in 200 g of...

Physics
1.2K views

The water flows through a horizontal tube the first part has an area of 50cm^2 and...

Basic Math
1.2K views

Suppose a statistician built a multiple regression model for predicting the total number of runs scored...

Biology
1.2K views

Which of the following research questions below is more focused and as a result will...

Basic Math
1.2K views

The parent function f(x) = x is reflected across the x-axis, vertically stretched by a...

Statistics
1.2K views

19 Construct an x chart Answer the questions associated with each given data set n...

Calculus
1.2K views

9 Find the limit if it exists lim f x x 1 9 b 0...

Algebra
1.2K views

A snow globe is packaged in a cubic container that has a volume of 64...

Accounting
1.2K views

Q2. Below is a table is data related to hours of use of a photocopier...

Accounting
1.2K views

Monty, Ltd., manufacturers boats and personal watercraft. The company operates three separate divisions: yachts, sailboats,...

Accounting
1.2K views

Inventory Accounts for a Manufacturing Company Fujita Company produces a single product. Costs accumulated at...