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What would happen to the NPV and PI for each project if the required rate of return increase?
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What are the three basic factors that influence the required rate of return for an investor?
1. real rate of return 2. inflation premium 3. risk premium
Why would the cost of debt increase if the risk free rate increase?
The rate of return on a security, in this case the debt, is defined by rd = rRF + Liquidity Premium + Maturity Risk Premium + Default Risk Premium Thus increasing the risk free rate (rRf) should increase the cost of debt. Hopefully that answers your question...
What might happen if the cycle were broken and used water could not return to the water cycle?
There will be no rain and soon there will be no water to drink, no more animals (will die from lack of water) and no more plants
When the level in carbon dioxide in the blood increases the?
If the level of carbon dioxide increases, the repiratory centers are signaled to increase the rate and depth of breathing. This will result in the return of normal CO2 (carbon dioxide) and slows the breathing rate.
When the temperature falls wator vapor can change into?
With falling temperatures, the water vapour will condense and return to liquid. This condensation will also happen when warm moist air in a room, meets the cold surface of a window.
How does a change in the required rate of return affect project's Internal Rate Of Return?
A change in the required rate of return will affect a project's Internal Rate of Return (IRR) by potentially shifting the project's feasibility. If the required rate of return increases, the project's IRR needs to be higher to be considered acceptable. Conversely, a decrease in the required rate of return could make the project's IRR more attractive.
Increase in expected growth rate does what to required return rate?
An increase in a firm's expected growth rate would normally cause its required rate of return to
If a project with conventional cash flows has a profitability index equal to 1.0 the project you will pay back during the life of the project II will have an internal rate of return that equals the?
required return
When using the net present value method for evaluating an investment an increase in the required rate of return will?
The increase in rate of return will make the investment more difficult to be accepted.
If the required rate of return is 11 the risk free rate is 7 and the market risk premium is 4 If the market risk premium increased to 6 percent what would happen to the stocks required rate of return?
If the required rate of return is 11 the risk free rate is 7 and the market risk premium is 4 If the market risk premium increased to 6 percent what would happen to the stocks required rate of return?
Relationship between required rate of return and coupon rate on the value of a bond?
required rate of return is the 'interest' that investors expect from an investment project. coupon rate is the interest that investors receive periodically as a reward from investing in a bond
What happens if the IRR is greater than the required rate of return?
The IRR rule states that if the internal rate of return (IRR) on a project or investment is greater than the minimum required rate of return - the cost of capital - then the decision would generally be to go ahead with it. Conversely, if the IRR on a project or investment is lower than the cost of capital, then the best course of action may be to reject it.
An increase in a firm's expected growth rate would normally cause its required rate of return to do what?
possibly increase, possibly decrease, or possibly remain unchanged
What is minimum rate of return?
It is the lowest return on project or investment that will make the firm or investor to accept that project.
What is minimum attractive rate of return?
It is the lowest return on project or investment that will make the firm or investor to accept that project.
What are the principal objections to the average rate of return method in evalueting capital investment proposals?
The rate of return on capital investment is the amount of money earned on an original investment. The objection to the standard rate of return is the restriction in accessing increase or leaving the project. There is also a fear that documented gain and financial increase is not always represent real money.
The Law of Return brought an increase in Israel's?
The Law of Return allowed for an increase in Israel's Jewish population.
