中级财务管理试题3781848565.docVIP

Use the following information to answer questions 1 through 4.You are analyzing a proposed project and have compiled the following information: Year Cash flow 0 -$120,000 1 $ 14,900 2 $ 86,200 3 $ 41,500 Required payback period 3 years Required return 10 percent____b____ 1. What is the net present value of the proposed project? a. -$5,122.30 b. -$4,035.31 c. $2,162.91 d. $____d____ 2. What is the discounted payback period? a. 2.46 years b. 2.67 years c. 2.97 years d_____c___ 3. Should the project be accepted based on the internal rate of return (IRR)? Why or why not? a. yes; The project IRR is less than the required return. b. yes; The project IRR is equal to zero. c. no; The project IRR is less than the required return. d. no; The project IRR is greater than zero.___c__ 4. Should the proposed project be accepted based on the profitability index (PI)? Why or why not? a. yes; The PI is less than 1.0. b. yes; The PI is greater than 1.0. c. no; The PI is less than 1.0. d. no; The PI is greater than 1.0.____d____ 5. Winslow, Inc. is considering opening a new plant to produce snow skis. The initial cost of the project is $2.4 million. This cost will be depreciated straight-line to a zero book value over the 10-year life of the project. The net income of the project is expected to be a loss of $280,000 a year for the first three years. The net income is projected at $70,000, $125,000, $320,000, $410,000, $460,000, $720,000, and $790,000 for years 5 through 10, respectively. What is the average accounting return on this project? a. 1.71 percent b. 8.56 percent c. 9.81 percent d. 17.13 percent____c____ 6. You are evaluating projects that are independent and have conventional cash flows. Rank each of the following analysis methods in order of preference from a financial viewpoint in relation to these projects. List the most valuable method