subject
Business, 24.11.2021 02:50 christine44gordon

Consider the cash flows on the following two timelines : Timeline One: -210 105 105 105 105 0 1 2 3 4
Timeline Two: -210 130 130 130 0 1 2 3

The appropriate rate of return for the risks in both business opportunities is r = 9%. The IRR for Timeline One is 34.90%, while the IRR for Timeline Two is higher at 38.71%. The NPV for Timeline One is $130.17, while the NPV for Timeline Two is lower at $119.07. Why is the Net Present Value lower on the second transaction compared to the first transaction, even though the IRR on the second transaction is higher?

ansver
Answers: 2

Another question on Business

question
Business, 22.06.2019 16:00
Advanced enterprises reports year-end information from 2018 as follows: sales (160,250 units) $968,000 cost of goods sold 641,000 gross margin 327,000 operating expenses 263,000 operating income $64,000 advanced is developing the 2019 budget. in 2019 the company would like to increase selling prices by 14.5%, and as a result expects a decrease in sales volume of 9%. all other operating expenses are expected to remain constant. assume that cost of goods sold is a variable cost and that operating expenses are a fixed cost. should advanced increase the selling price in 2019?
Answers: 3
question
Business, 22.06.2019 19:00
When making broccoli cream soup, the broccoli and aromatics should be a. burned. b. simmered. c. puréed. d. sweated.
Answers: 2
question
Business, 22.06.2019 21:40
Rebel technology maintains its records using cash-basis accounting. during the year, the company received cash from customers, $43,000, and paid cash for salaries, $23,500. at the beginning of the year, customers owe rebel $1,000. by the end of the year, customers owe $6,600. at the beginning of the year, rebel owes salaries of $5,600. at the end of the year, rebel owes salaries of $3,300. determine cash-basis net income and accrual-basis net income for the year.
Answers: 2
question
Business, 22.06.2019 22:40
Crowding out is a phenomenon focused upon most by the macroeconomists of whereby a government deficit interest rates, which in turn private investment spending. this group also believed that fiscal policy is the only thing that can lower natural unemployment. is just as effective in countering recessions as monetary policy. can be used most of the time, but monetary policy becomes a better option when velocity is fluctuating. should be used only if the central bank follows a monetary policy rule. faces problematic lags in propagating changes throughout the economy.
Answers: 3
You know the right answer?
Consider the cash flows on the following two timelines : Timeline One: -210 105 105 105 105 0 1 2...
Questions
question
Social Studies, 05.07.2019 16:30
question
Physics, 05.07.2019 16:30
question
Mathematics, 05.07.2019 16:30