Submitted Apr 19, 2023 at 8:54am
Question 1
1 / 1 pts
You are considering the investment of $151,000 (today) in a lemonade stand.
Also, you expect the stand to generate the following future cash flows:
At the end of year 1: $0
At the end of year 2: $0
At the end of year 3: $0
At the end of year 4: $267,000
What is the IRR (Internal Rate of Return) of this project?
(Answer to the nearest 0.01%)
Correct!
15.31
Correct Answer
15.31
UnansweredQuestion 2
0 / 1 pts
You are a real estate investor and you are considering an offer to buy an office building for a
price of $103,000,000
You project that the building will generate net annual cash flows (starting at the end of the 1st
year and continuing on in perpetuity) of $5,000,000
If you require a 3% rate of return for similar investments, what is the NPV (Net Present Value) of
the investment
(Answer to the nearest $0.01)
You Answered
Correct Answer
63,666,666.67
UnansweredQuestion 3
0 / 1 pts
You are a real estate investor and you are considering an offer to buy an office building for a
price of $76,000,000
You project that the building will generate net annual cash flows (starting at the end of the 1st
year and continuing on in perpetuity) of $17,000,000
What is the IRR (Internal Rate of Return) of the investment
(Answer to the nearest 0.01%)
You Answered
Correct Answer
22.37
UnansweredQuestion 4
0 / 1 pts
Project A has an IRR of 18% and an NPV of $1.2 million. Project B has an IRR of 14% and an
NPV of $1.5 million. The projects A & B are mutually exclusive. Which project should you
choose?
Correct Answer
Project B only
Project A only
Neither Project A nor B
Both Projects A & B
UnansweredQuestion 5
0 / 1 pts
You are considering the investment of $3,000 (today) in a lemonade stand.
Also, you expect the stand to generate the following future cash flows:
At the end of year 1: $6,000
At the end of year 2: $9,000
At the end of year 3: $6,000
At the end of year 4: $8,000
What is the NPV (Net Present Value) of this project, if you require a 13% rate of return?
(Answer to the nearest $0.01)
You Answered
Correct Answer
18,422.91
UnansweredQuestion 6
0 / 1 pts
Project A is a 1-year project that requires an investment of $200,000 today and generates a
positive cash-flow of $260,000 in exactly 1 year. Project B is a 1-year project that requires an
investment of $400,000 today and generates a positive cash flow of $500,000 in exactly 1 year.
The projects are independent and NOT mutually exclusive. If you require a 28% return, which
one or ones should you choose?
Correct Answer
Project A only
Project B only
Both Projects A & B
Neither Project A nor Project B
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