1.Project B requires an Initial (Year 0) Investment of $5,000,000; and will retu

Question

1.Project B requires an Initial (Year 0) Investment of $5,000,000; and will return $1,115,000 for each year of its five year useful life. What is the project's Internal Rate of Return?

a. 30.74%

b. 3.74%

c. 23.74%

d. 13.74% .

2.A project has up front (Year 0) costs of $75,000; and will generate Cash Flows of 25,000 in its first 2 years and $ 50,000 in Year 3 and $15,000 in Year 4. What is its payback period if the company requires a 14% return on projects of similar risk?

a. 2.25 PERIODS

b. 4.00 PREIODS

c. 2.50 PERIODS

d. 3.00 PERIODS

3.The constraint when a company DOES NOT HAVE sufficient funds to undertake all desirable capital budgeting projects is called: a. Mutual Exclusivity

b. Capital Restrictions

c. Capital Rationing

d. Capital Funding

Explanation / Answer

correct answers are

1) b

2) c

3) c

4) 3

5) d

these all correct answer

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