Tick all those statements that are correct. The internal rate of return (IRR) generated by a positive cash flow stream of n payments ☐a. is always given by the solution of a quadratic equation O b. can be -2 for a suitable cashflow O c. can be 17 for a suitable cashflow Od. is always bigger or equal than-1 O e. is always smaller or equal than +1

Tick all those statements that are correct. The internal rate of return (IRR) generated by a positive cash flow stream of n payments ☐a. is always given by the solution of a quadratic equation O b. can be -2 for a suitable cashflow O c. can be 17 for a suitable cashflow Od. is always bigger or equal than-1 O e. is always smaller or equal than +1

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.12: Uneven, Or Irregular, Cash Flows

Problem 1ST

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Select all the correct statements. The internal rate of return (IRR) generated by a positive cash flow stream of n payments a. is always given by the solution of a quadratic equation b. is always bigger or equal than -1 c. can be -2 for a suitable cashflow d. can be 17 for a suitable cashflow e. is always smaller or equal than +1
Consider the calculation of an external rate of return (ERR). The positive cash flows in the cash flow profile are moved forward to t = n using what value of i in the (F|P,i,n–t) factors? a. 0 b. The unknown value of ERR (i′) c. MARR d. IRR.
Which of the following statements are correct? The internal rate of return (IRR) generated by a positive cash flow stream of n payments. (a)is always smaller or equal than +1 (b)is always given by the solution of a quadratic equation (c)is always bigger or equal than -1 (d)can be 17 for a suitable cashflow (e)can be -2 for a suitable cashflow
In a cash flow series regarding the gradient: Select one: a. Uniform gradient signifies that an income or disbursement changes by the same amount in each interest period b. Either an increase or decrease in the amount of a cash flow is called the gradient с. The gradient in the cash flow may be positive or negative o d. All of the above is correct
Compute F so the following cash flows have a future worth of 0.
59. Modified True or False T means Correct and F means Wrong Scenario: If you have a series of cash flows, each of which is positive, you can solve for I, where the solution value of I causes the PV of the cash flows to equal the cash flow at Time 0. If you have a series of cash flows, and CF0 is negative but each of the following CFs is positive, you can solve for I, but only if the sum of the undiscounted cash flows exceeds the cost. To solve for I, one must identify the value of I that causes the PV of the positive CFs to equal the absolute value of the FV of the negative CFs. It is impossible to find the value of I without a computer or financial calculator. If you solve for I and get a negative number, then you must have made a mistake. If CF0 is positive and all the other CFs are negative, then you can still solve for I. Group of answer choices T,T,T,T F,T,F,T F,F,F,T F, F, F, F F,T,F,F T,T,F,F, F,F,T,T
The internal rate of return is: the discount rate that equates the present value of the cash inflows with the present value of the cash outflows. the discount rate that makes NPV negative and the PI greater than one. the rate of return that makes the NPV positive. the discount rate that makes the NPV positive.
All of the following are true statements about the a gradient series of cash flow except the following: O The cash flows increase by the gradient step, G, every other period The gradient step, G, is a constant value O The first gradient positive cash flow occurs at the end of the second time period O The series can be represented by the sum of a uniform series and a gradient series
The gradient amount in linear or geometric cash flow can be positive or negative value. Select one: True False
Determine the sum of the cash flows in the incremental difference column (i.e., Y-X) for systems X and Y.
In the accompanying diagram, what is the value of K on the left-hand cash-flow diagram that is equivalent to the right-hand cash-flow diagram? Let i = 12%.
An investment is guaranteed to have a unique value of IRR if which of the following is true? a. Alternating positive and negative cash flows b. An initial negative cash flow followed by all positive cash flows and the sum of the positive cash flows is greater than the magnitude of the negative cash flow c. A unique value for ERR d. A positive PW at MARR.