University of Louisiana, Lafayette - FNAN 522 Module 4 Homework

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University of Louisiana, Lafayette - FNAN 522 Module 4 Homework.Started on Monday, 18 November 2019, 7:27 AM State Finished Completed on Monday, 18 November 2019, 5:01 PM Time taken 9 hours 34 mins... Grade 20.00 out of 20.00 (100%) A company is analyzing a variety of potential investments using different capital budgeting methods. Which of the following represents the most profitable choice based on the information provided? Select one: a. The company picks a project with an NPV of $250,000 over one with an NPV of $300,000. b. The company picks a project with a 5 year payback period over one with a 3 year payback period. c. The company picks a project with profitability index of 1.25 over a project with a PI of -.25. d. The company picks a project with an accounting rate of return 5% over one with an ARR of 3%. FNAN522-020_860-202020Question 2 Correct Mark 1.00 out of 1.00 Question 3 Correct Mark 1.00 out of 1.00 Question 4 Correct Mark 1.00 out of 1.00 A firm is trying to choose the most profitable project to invest in. Which of the following should be used as the company's discount rate? Select one: a. The projects' average internal rate of return. b. The company's profitability index. c. The company's reinvestment rate or weighted average cost of capital. d. The company's weighted average cost of capital. Calculate the discounted payback period for a project with a discount rate of 5% the following cash flows:Year 0: -$2000Year 1: $1000Year 2: - $1000Year 3: $1000Year 4: $3000Year 5: $2000 Select one: a. 4.44 [Show More]

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