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NEW QUESTION: 1
Which of the following projects would likely produce multiple Internal Rates of Return? Assume a 14% discount rate.
Project A
Initial investment outlay: ($500,000)
t1: $900,000
t2: ($100,000)
t3: ($100,000)
t4: ($10,000)
Project B
Initial investment outlay: ($500,000)
t1: $0.00
t2: $650,000
Project C
Initial investment outlay: ($50,000)
t1: $0.00
t2: $0.00
t3: $65,000
t4: $0.00
t5: $0.00
t6: $65,000
Project D
Initial investment outlay: ($1,000,000)
t1: $675,000
t2: $675,000
t3: ($1,500)
t4: $1,500
Project E
Initial investment outlay: ($1,000,000)
t1: $0.00
t2: $0.00
t3: $0.00
t4: $0.00
t5: $2,000,000
A. Project C
B. All of these projects will likely result in multiple Internal Rates of Return.
C. Project A and D
D. Project A
E. Project A, D, and E
F. Project B
Answer: C
Explanation:
Explanation/Reference:
Explanation:
First of all, the cost of capital is irrelevant in Internal Rate of Return calculations. What is being examined in this example is the determination of "normal" versus "non-normal" projects. Non-normal projects are classified as projects that possess non-normal cash flows. In evaluating projects with "non-normal cash flows" the Internal Rate of Return method will often produce multiple IRRs which leads to an incorrect accept/reject decision. Non-normal cash flows are defined as cash flows in which the sign changes more than once. Projects A and D involve cash outflows superimposed within their cash inflows, resulting in a sign change from positive to negative and negative to positive. In examining projects such as this, it is advisable to use either the NPV or MIRR methods, which are not subject to the problem of multiple IRRs.
From observation alone, we can determine that project A and D are non-normal projects, and are thus likely to result in multiple IRR calculations. While project B, C and E have periods of zero cash flows, each only has one change of sign in the overall cash flow process, and therefore all three projects should be characterized as "normal" for purposes of examination. While the cost of capital has been provided, it is not necessary for the determination of the correct answer in this case. What you should look for are projects with non-normal cash flows, and this should not involve any computational analysis. Besides, the cost of capital is not incorporated into the Internal Rate of Return calculation, rather, it is a component of the NPV and MIRR computational methods.
NEW QUESTION: 2
You have the following customer dimensions;
You need to create a % of total (by region) calculation by customer in you aggregate storage database for Net_Revenue. Select the best syntax for member formula so that the % Total calculation works at all levels of customer dimension.
A. (customer.CurrentMember, [Net_Revenue]) / (customer.CurrentMember,Parent, [Net_Revenue])
B. (Net_Revenue]) / (Parent. [Net_Revenue])
C. (customer.CurrentMember, [Net_Revenue]) / (customer. [Net_Revenue], Products, YearTotal);
D. (customer.CurrentMember, [Net_Revenue]) / (customer.CurrentMember.Parent, [Net_Revenue]);
E. (customer.CurrentMember, [Net_Revenue]) / (customer. [Net_Revenue]);
Answer: D
Explanation:
Explanation/Reference:
We need to use the methods .CurrentMember and CurrentMember.Parent to get the correct % throughout all level of the customer dimension.
NEW QUESTION: 3
IS 감사인은 IT 보안 정책을 검토 할 때 다음 중 무엇을 찾아야 합니까?
A. 회사 자산 보호에 대한 책임 할당
B. 위험 기반 시스템 분류
C. 바이러스 방지 구현 전략
D. 정보 자산의 인벤토리
Answer: A