答案和详解如下： 1．Which of the following statements about the internal rate of return (IRR) and net present value (NPV) is least accurate? A) The discount rate that causes the project's NPV to be equal to zero is the project's IRR. B) The IRR is the discount rate that equates the present value of the cash inflows with the present value of the outflows. C) For mutually exclusive projects, if the NPV rankings and the IRR rankings give conflicting signals, you should select the project with the higher IRR. D) The NPV method assumes that cash flows will be reinvested at the cost of capital, while the IRR method assumes that they are reinvested at the IRR. The correct answer was C) The NPV method is always preferred over the IRR, because the NPV method assumes cash flows are reinvested at the cost of capital. Conversely, the IRR assumes cash flows can be reinvested at the IRR. The IRR is not an actual market rate.
2．Which of the following statements regarding the net present value (NPV) and internal rate of return (IRR) is least accurate? A) The NPV tells how much the value of the firm will increase if you accept the project. B) For mutually exclusive projects, the internal rate of return IRR and the net present value NPV methods may give conflicting accept/reject decisions. C) For independent projects, the internal rate of return IRR and the NPV methods always yield the same accept/reject decisions. D) For mutually exclusive projects, you must accept the project with the highest NPV regardless of the sign of the NPV calculation. The correct answer was D) If the NPV for two mutually exclusive projects is negative, both should be rejected.
3．The underlying cause of ranking conflicts between the net present value (NPV) and internal rate of return (IRR) methods is the underlying assumption related to the: A) initial cost. B) reinvestment rate. C) cash flow timing. D) profitability indices. The correct answer was B) The IRR method assumes all future cash flows can be reinvested at the IRR. This may not be feasible because the IRR is not based on market rates. The NPV method uses the weighted average cost of capital (WACC) as the appropriate discount rate.
4．Apple Industries, a firm with unlimited funds, is evaluating five projects. Projects A and B are independent and Projects C, D, and E are mutually exclusive. The projects are listed with their rate of return and NPV. Assume that the applicable discount rate is 10 percent. Project | Status | Rate of Return | Net Present Value | A | Independent | 14% | $10,500 | B | Independent | 12% | $13,400 | C | Mutually Exclusive | 11% | $16,000 | D | Mutually Exclusive | 15% | $14,000 | E | Mutually Exclusive | 12% | $11,500 |
Rank the projects the firm should select. A) Project A, Project B, and Project D. B) Project A, Project B, and Project C. C) Project A and Project D. D) All projects should be selected. The correct answer was B) When it comes to independent projects, financial managers should select all with positive NPVs, resulting in inclusion of Project A and Project B. Remember that projects with positive NPVs will increase the value of the firm. Among mutually exclusive projects, financial managers would select the one with the highest NPV, in this case Project C. Although all projects have positive NPVs, only one of the latter three can be chosen. If the selection were based upon the internal rate of return, Project D would be chosen instead of Project C. This shows why NPV is the superior decision criteria because Project C is the investment that will cause the greatest increase to the value of the firm. | 
发表于 2008-4-4 15:38
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