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-If the Cost of Goods decreases and all other factors remain the same then: ...

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Accounting

-If the Cost of Goods decreases and all other factors remain the same then:

NPV will remain the same

Not enough information

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NPV will increase (Explain why this is the correct answer)

NPV will decrease

-Milson Company is considering the purchase of ABC Company at a price of $190,000. If Milson makes the acquisition, its after tax cash flows will increase by $30,000 per year and remain at this new level forever. If the company MARR is 15%, should Milson buy ABC Company?

image

Yes, because the NPV = $30,000

Yes, because the NPV = $200,000

image

Yes, because the NPV = $10,000 (explain why this is the correct answer)

No, because NPV

There is not enough information given to answer this question

-Consider a project with an initial outflow at time 0 and positive cash flows in all subsequent years. As the discount rate (MARR) is increased then

image

IRR remains constant while the NPV decreases (explain why this is the correct answer).

IRR increases while the NPV remains constant

image

IRR decrease while the NPV decreases

IRR remains constant while the NPV increases

IRR decreases while the NPV remains constant

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