答案和详解如下： 1.An investment consortium is evaluating two mutually exclusive real estate investment opportunities: a multi-unit apartment complex, and a local shopping center. This investment group requires a 9 percent after-tax return on equity capital. For the apartment complex, NPV and IRR analysis result in an NPV of USD7.5 million and an IRR of 11percent. For the shopping center, the NPV is USD6.8 million and the IRR is 14 percent. If the investors require an after-tax return of 9 percent on either investment, which of the two investments should be undertaken? A) Both investments should be undertaken because they both have positive NPVs and their IRRs exceed the required return on equity. B) The shopping center should be selected because it has the highest IRR. C) Neither investment should be undertaken based on NPV and IRR analysis because the results conflict. D) The apartment complex because it has the highest NPV. The correct answer was D) Since the projects are mutually exclusive, only one may be selected. When ranking conflicts exist between the IRR and NPV approaches, the project with the highest NPV should be selected. 2.Which of the following cash flow streams is most likely to have multiple IRRs? Purchase Price
| Cash Flow 1 | Cash Flow 2 |
A) $1.7 million $8.0 million gain $5 million gain B) $1.8 million $10 million gain $9 million expense C) $0.8 million $1.1 million gain $0 D) $1.0 million $1.0 million gain $0.1 million expense The correct answer was B) When there is a reversal in the sign of the cash flows, it is likely that there will be multiple IRR solutions. In fact, for the cash flow stream {-1.8; -10; -9} the IRRs are 13 and 343 percent. 3.Which of the following statements is most accurate regarding the evaluation of real estate investments that require relatively large cash expenses during the life of the investment? A) Multiple internal rates may occur. B) The recommendation of the IRR and NPV methods are likely to conflict. C) It is possible to have a negative NPV even if the investment is acceptable. D) The IRR and NPV evaluation methods will conflict at relatively low discount rates. The correct answer was A) When there is a reversal in the signs of the investment’s cash flows, it is likely that multiple IRRs will exist. This renders the IRR evaluation approach ineffective. 4．Which of the following statements regarding the evaluation of mutually exclusive projects using the NPV and/or IRR approaches is FALSE? A) Whenever a conflict exists between the IRR and NPV approaches, the project with the highest IRR should be selected. B) Ranking conflicts between the IRR and NPV methods are likely to result when the projects being evaluated have relatively large differences in the size of their cash flows. C) Ranking conflicts between the IRR and NPV methods are likely to result when the timing or pattern of the projects’ cash flows differ significantly. D) Multiple IRRs are likely to exist when there is a relatively large change in the direction of investment’s cash flows. The correct answer was A) Whenever a conflict exists between the IRR and NPV approaches, the project with the highest NPV should be selected. | 
发表于 2008-5-21 11:47
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