What is the method used to create a comparable time framework for all projects under consideration with different life spans?

C3-Capital Budgeting in Practice follow slides

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Other
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University
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Hard
Chi Chu
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15 questions
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1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Risk-Adjusted Discount Rate
Monte-Carlo simulation
Replacement-chain method
Equivalent Annual Annuity Method
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
In the context of capital budgeting, what does the NPV and IRR conflict refer to?
Conflict between the risk-free rate and risk premium
Conflict between the net present value and internal rate of return
Conflict between the standard deviation and coefficient of variation
Conflict between the expected value and variance
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which approach in dealing with risk in capital budgeting involves calculating the expected value, variance, standard deviation, and coefficient of variation?
Statistical approach
Conventional approach
Sensitivity analysis
Decision Tree
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What type of real option in capital budgeting involves the manager's option of spending additional resources at a future date?
Flexibility Options
Abandonment Options
Follow-on investment option
Expansion Options
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the method used to determine the incremental cash flows of a new asset in the asset replacement decision process?
Risk-Adjusted Discount Rate
Certainty Equivalent approach
Sensitivity analysis
NPV approach
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which approach in dealing with risk in capital budgeting involves converting the risky cash flows into riskless equivalents?
Decision Tree
Sensitivity analysis
Conventional approach
Statistical approach
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the main purpose of sensitivity analysis in capital budgeting?
To identify the most significant variables affecting NPV estimate
To calculate the expected value of net cash flows
To determine the risk-free rate
To conduct a Monte-Carlo simulation
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