PMP Sample Questions - Tutorialspoint ~ CNBCInfo

There, you'll have an opportunity to meet some of the authors of our bestsellers. They always find something creative and exciting for us that we can do for our homework. It can be a project or a presentation.You have good outcomes with your clients- protip: exceed their expectations for an awesome job success score. All of the above. Which of the following describes your responsiveness score? Your responsiveness score is based on how quickly you accept or decline client's invitations to jobs.Net present value: is the best method of analyzing mutually exclusive projects. The length of time a firm must wait to recoup the money it has invested in a Project B has an expected payback period of 3.1 years with a net present value of $26,400. Which project(s) should be accepted based on the...NPV (Net present value) is the difference between the present value of cash inflows and outflows discounted at a specific rate. The Net Present Value (NPV) is a method that is primarily used for financial analysis in determining the feasibility of investment in a project or a business.Which one of the following best describes this project? Explanation: The net present value shows a sum of money used to determine what may happen if the money was invested. Net present value or NPV, is show by taking the present value and subtracting it from the present value over a...

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2 Which of the following is likely to benefit most from the use of test tools providing test capture and 15 Which of the following is false? a) In a system two different failures may have different severities 29 Which of the following is the best source of Expected Outcomes for User Acceptance Test scripts...Quite simply NPV (Net Present Value) is the present value of the future after-tax cash flows minus I have seen negative NPV projects get approved and positive NPV projects abandoned due to a In short, Net Present Value (NPV) is the difference between: the investment value of something (a...What is the net present value of the project (to the nearest thousand dollars)? Answer 1.4: E The project has a net present value of zero at a 12% market capitalization rate, so the annual cash All but which of the following items should be considered? A. B. C. D. E. The present value of the FSA...Every project should document its architecture. Of the following, which is the best reason to avoid domain analysis? Which of the following states that there are 2 persons associated with a contact and there can be any number of contacts?

fin exam 3 JoyceA project has a net present value of zero. | Quizlet

Which one of thefollowing best describes this project? A) The project has no cash flows. D) The project's internal rate of return must be less than therequired rate of return used in the NPV calculation.Which of the following should not be a criterion for a good research project? Demonstrates the abilities of the researcher. Is dependent on the completion of other projects. Present the kinds of research methodologies used in previous studies.14) Which of the following is best describes UML? c) Component elements have important aspects that are not representable using the provided subsystem element notation. All class diagrams created during design of a system should be maintained as part of the project.Net present value (NPV) of a project is the present value of net after-tax cash inflows of the project determined at a risk-adjusted discount rate Net present value (NPV) of a project represents the change in a company's net worth/equity that would result from acceptance of the project over its life.Zero has a value of zero wherever it happens to be. Net Present Value (NPV) means the difference between the present value of the future cash flows from an investment and the amount of A positive net present value means a better return, and a negative net present value means a worse return.

Home Accounting Capital Budgeting Net Present Value

Net present value (NPV) of a project represents the alternate in a company's net price/equity that might consequence from acceptance of the project over its lifestyles. It equals the present value of the project net money inflows minus the preliminary investment outlay. It is one of the maximum reliable ways used in capital budgeting as a result of it's in keeping with the discounted money go with the flow way.

Net present value calculations require the following 3 inputs:

Projected net after-tax cash flows in each and every duration of the project. Initial investment outlay Appropriate discount price i.e. the hurdle charge.

Net after-tax money flows equals total cash influx throughout a length, including salvage value if any, much less money outflows (including taxes) from the project during the period.

The initial funding outlay represents the general cash outflow that happens at the inception (time 0) of the project.

The present value of net money flows is determined at a discount price which is reflective of the project chance. In most circumstances, it's appropriate to start with the weighted average value of capital (WACC) of the company and adjust it up or down depending on the distinction between the risk of the specific project and average risk of the corporate as a whole.

Formulas and calculation

The first step keen on the calculation of NPV is the estimation of net money flows from the project over its lifestyles. The second step is to bargain those cash flows at the hurdle rate.

The net money flows is also even (i.e. equal money flows in several periods) or asymmetric (i.e. other cash flows in different periods). When they're even, present value will also be easily calculated by way of using the formula for present value of annuity. However, if they are uneven, we wish to calculate the present value of each and every individual net money influx one after the other.

Once we now have the general present value of all project cash flows, we subtract the initial investment on the project from the total present value of inflows to reach at net present value.

Thus we've the following two formulation for the calculation of NPV:

When net cash flows are even, i.e. when all net money flows are equivalent:

When net cash flows are uneven, i.e. when net money flows range from period to duration:

These formulas ignore the impact of taxes and inflation. Read further: NPV and taxes, NPV and inflation and international capital budgeting.

Decision rule

In case of standalone projects, settle for a project only if its NPV is certain, reject it if its NPV is detrimental and keep indifferent between accepting or rejecting if NPV is 0.

In case of mutually exclusive initiatives (i.e. competing projects), settle for the project with upper NPV.

Examples

Example 1: Even net cash flows

Calculate the net present value of a project which requires an initial investment of 3,000 and it's anticipated to generate a net money flow of ,000 every month for twelve months. Assume that the salvage value of the project is zero. The goal price of return is 12% in line with annum.

Solution

We have,Initial Investment = 3,000Net Cash Inflow consistent with Period = ,000Number of Periods = 12Discount Rate consistent with Period = 12% ÷ 12 = 1%

Net Present Value= ,000 × (1 − (1 + 1%)-12) ÷ 1% − 3,000= ,000 × (1 − 1.01-12) ÷ 0.01 − 3,000≈ ,000 × (1 − 0.887449) ÷ 0.01 − 3,000≈ ,000 × 0.112551 ÷ 0.01 − 3,000≈ ,000 × 11.2551 − 3,000≈ 2,754 − 3,000≈ 9,754

Example 2: Uneven net money flows

An initial investment of ,320 thousand on plant and equipment is predicted to generate net cash flows of ,411 thousand, ,070 thousand, ,824 thousand and

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,065 thousand at the end of first, 2d, 3rd and fourth year respectively. At the finish of the fourth 12 months, the equipment will be sold for 0 thousand. Calculate the net present value of the funding if the cut price charge is eighteen%. Round your resolution to nearest thousand greenbacks.

Solution

PV Factors:Year 1 = 1 ÷ (1 + 18%)1 ≈ 0.8475Year 2 = 1 ÷ (1 + 18%)2 ≈ 0.7182Year 3 = 1 ÷ (1 + 18%)3 ≈ 0.6086Year 4 = 1 ÷ (1 + 18%)4 ≈ 0.5158

The relaxation of the calculation is summarized underneath:

Year1234Net Cash Inflow ,411,070,824

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,065Salvage Value900Total Cash Inflow ,411,070,824

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,965× Present Value Factor0.84750.71820.60860.5158Present Value of Cash Flows

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,890.68

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,923.01 ,544.671,529.31Total PV of Cash Inflows,888− Initial Investment− 8,320Net Present Value

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,568thousand

Strengths and weaknesses of NPV

Strengths

Net present value accounts for time value of cash which makes it a higher method than those investment appraisal techniques which do not bargain long term cash flows akin to payback length and accounting price of go back.

Net present value is even better than another discounted cash waft ways corresponding to IRR. In eventualities where IRR and NPV give conflicting selections, NPV decision must be preferred.

Weaknesses

NPV is in the end an estimation. It is delicate to adjustments in estimates for long term cash flows, salvage value and the price of capital. NPV research is repeatedly coupled with sensitivity research and state of affairs analysis to see how the conclusion adjustments when there's a change in inputs.

Net present value does not be mindful the dimension of the project. For example, say Project A calls for initial investment of million to generate NPV of 1 million while a competing Project B calls for

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million funding to generate an NPV of [scrape_url:1]

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[/scrape_url].Eight million. If we base our choice on NPV on my own, we will choose Project A as it has upper NPV, however Project B has generated extra shareholders' wealth in keeping with greenback of initial funding ([scrape_url:1]