5.) a.) The discounted cash inflows of a project minus the discounted cash outfl
ID: 424319 • Letter: 5
Question
5.)
a.)
The discounted cash inflows of a project minus the discounted cash outflows is referred to as the ________.
screening value
real option
internal rate of return
net present value
b.)
If the net present value of a project is greater than zero, then the:
project will require 5 years to break even.
project cannot be carried out as the cash outflow is too high.
project generates wealth.
present value of cash outflows is higher than present value of cash inflow.
c.)
NewDigger Inc. makes backhoes for digging ditches and trenches. It has developed an acid that, when poured on the ground, reduces the time and labor required to dig trenches of various depths, depending on how much is applied. The firm has recently started using this product commercially. This would most probably be considered a(n) ________ project for NewDigger.
derivative
breakthrough
platform
d.)
Coolers Inc. has developed a new generation of air conditioners. It has upgraded the old technology by making the air conditioners work on voice sensors instead of remote control. Though the technology is new, Coolers has decided to introduce the product in the market at a low cost. This project is a(n) ________ project for Coolers Inc.
breakthrough
platform
derivative
advanced R&D
screening value
real option
internal rate of return
net present value
b.)
If the net present value of a project is greater than zero, then the:
project will require 5 years to break even.
project cannot be carried out as the cash outflow is too high.
project generates wealth.
present value of cash outflows is higher than present value of cash inflow.
c.)
NewDigger Inc. makes backhoes for digging ditches and trenches. It has developed an acid that, when poured on the ground, reduces the time and labor required to dig trenches of various depths, depending on how much is applied. The firm has recently started using this product commercially. This would most probably be considered a(n) ________ project for NewDigger.
derivative
breakthrough
platform
d.)
Coolers Inc. has developed a new generation of air conditioners. It has upgraded the old technology by making the air conditioners work on voice sensors instead of remote control. Though the technology is new, Coolers has decided to introduce the product in the market at a low cost. This project is a(n) ________ project for Coolers Inc.
breakthrough
platform
derivative
advanced R&D
Explanation / Answer
5 a) net present value
B)project cannot be carried out as the cash outflow is too high
C)breakthrough
D)platform
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