Here are some simple Econ questions that i dont understand well can someone pls

Question

Here are some simple Econ questions that i dont understand well can someone pls help me with it its my homework and due soon

Question 1 (1 point) Net present worth analysis requires equal analysis periods for different alternatives? worth analysis requires equa O True O False Save Question 2 (1 point) For a project with inital cost of $10,000 and yearly revenue of $2000 for 10 years, the time to recover the investment will Will be shorter if using payback, but the same for NPW and FW analysis Be the same if using payback, NPW and FW analysis Will be the same for payback and FW but longer for NPW Will be longer if using payback, but the same for NPW and FW analysis Save Question 3 (1 point) Payback periods can be used as a screening tool for liquidity O True False Save

Explanation / Answer

(1) True

Net present worth (NPW) is the sum of all cash inflows & outflows, discounted at the required rate of return. If different projects have different life, the discount factors will be different & so NPW becomes useless.

(2) Time to recover will be shorter using Payback period, but the same using NPW and FW.

The reason is: Payback period uses undiscounted cash flows, but NPW & FW uses discounted cash flows.

(3) False

Payback period only says how long it times for project's future cash flows to recover initial investment.

(4) False

MARR is almost never zero.

(5) Indifferent.

A zero EUAC is an indifference point.

(6) True

(7) 0, 1 or 2

(8) True

(9) False

Salvage value can be used even before termination.

(10) True

LCCA is used for alternatives with different lives.

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.