Deck 3: Product Design and Development

Question 1

-What is the net present value of cash flows using a 7% discount rate for Year 1?

A)$214,953.27
B)$246,100.00
C)$230,000.00
D)$200,000.00
E)Do not have enough information to compute

Answer 1

$214,953.27

Question 2

-What is the net present value of cash flows using a 7% discount rate for Year 2?

A)$163,551.00
B)$187,250.00
C)$152,851.78
D)$200,357.50
E)Do not have enough information to compute

Answer 2

$152,851.78

Question 3

-What is the net present value of cash flows using a 7% discount rate for Year 3?

A)$186,915.89
B)$163,259.58
C)$214,000.00
D)$245,008.60
E)Do not have enough information to compute

Answer 3

$163,259.58

Question 4

-What is the net present value of cash flows using a 7% discount rate for Year 4?

A)$163,551.40
B)$229,389.30
C)$187,250.00
D)$133,506.66
E)Do not have enough information to compute

Question 5

-What is the net present value of cash flows using a 7% discount rate for Year 5?

A)$116,822.43
B)$89,123.27
C)$133,750.00
D)$133,506.66
E)Do not have enough information to compute

Question 6

-Calculate the total net present value for the project.

A)$446,174.37
B)$46,305.44
C)$103,694.56
D)$318,350.00
E)Do not have enough information to compute

Question 7

-For the project, how long will it take to recover the initial investments?

A)Less than one year
B)Between one year and two years
C)Between two years and three years
D)More than five years
E)Do not have enough information to compute

Question 8

-If the discount rate for the project is changed to 10%, find the total net present value.

A)$98,875.51
B)$345,500.00
C)$538,481.25
D)$172,727.27
E)Do not have enough information to compute

Question 9

-If the discount rate for the project is changed to 11%, find the total net present value.

A)$165,315.32
B)$570,738.29
C)$354,550.00
D)$115,061.25
E)Do not have enough information to compute

Question 10

-The internal rate of return for the project is

A)Under 10%
B)Between 10% and 12%
C)Between 12% and 13%
D)Between 13% and 14%
E)Over 14%

Question 11

The product design costs are $75,000. The following table shows the projected cash in-flows. Assume a 4-year lifespan.


-Calculate the total net present value for the project using a discount rate of 9%.

A)$51,000.00
B)$75,000.00
C)$9,078.37
D)$46,788.99
E)Do not have enough information to compute

Question 12

The product design costs are $75,000. The following table shows the projected cash in-flows. Assume a 4-year lifespan.


-For the project, how long will it take to recover the initial investments?

A)Less than one year
B)Between one year and two years
C)Between two years and three years
D)Between three years and four years
E)More than four years

Question 13

The product design costs are $75,000. The following table shows the projected cash in-flows. Assume a 4-year lifespan.


-Calculate the total net present value for the project using a discount rate of 12%.

A)$5,163.82
B)$75,000.00
C)$9,078.37
D)$51,000.00
E)Do not have enough information to compute

Question 14

The product design costs are $75,000. The following table shows the projected cash in-flows. Assume a 4-year lifespan.


-Calculate the total net present value for the project using a discount rate of 15%.

A)$5,163.82
B)$1,580.42
C)$9,078.37
D)$51,000.00
E)Do not have enough information to compute

Question 15

The product design costs are $75,000. The following table shows the projected cash in-flows. Assume a 4-year lifespan.


-The internal rate of return for the project is

A)Under 10%
B)Between 10% and 12%
C)Between 12% and 14%
D)Between 14% and 16%
E)Over 16%

Question 16

Fabricating Solutions is looking at the financials for a CNC machine. The expected life cycle for the machine is 6 years. The initial projected product design costs are $725,000. Fabricating Solutions typically uses a discount rate of 14% for all new product financials.


-Calculate the total net present value for the project using a discount rate of 14%.

A)$725,000.00
B)$328,947.37
C)$120,003.76
D)$845,003.76
E)Do not have enough information to compute

Question 17

Fabricating Solutions is looking at the financials for a CNC machine. The expected life cycle for the machine is 6 years. The initial projected product design costs are $725,000. Fabricating Solutions typically uses a discount rate of 14% for all new product financials.


-For the project, how long will it take to recover the initial investments?

A)Less than two years
B)Between two years and three years
C)Between three years and four years
D)Between four years and five years
E)More than five years

Question 18

Fabricating Solutions is looking at the financials for a CNC machine. The expected life cycle for the machine is 6 years. The initial projected product design costs are $725,000. Fabricating Solutions typically uses a discount rate of 14% for all new product financials.


-Calculate the total net present value for the project using a discount rate of 17%.

A)$71,762.95
B)$320,512.82
C)$796,762.95
D)$725,000.00
E)Do not have enough information to compute

Question 19

Fabricating Solutions is looking at the financials for a CNC machine. The expected life cycle for the machine is 6 years. The initial projected product design costs are $725,000. Fabricating Solutions typically uses a discount rate of 14% for all new product financials.


-For the project, how long will it take to recover the initial investments using a discount rate of 17%?

A)Less than two years
B)Between two years and three years
C)Between three years and four years
D)Between four years and five years
E)More than five years

Question 20

Fabricating Solutions is looking at the financials for a CNC machine. The expected life cycle for the machine is 6 years. The initial projected product design costs are $725,000. Fabricating Solutions typically uses a discount rate of 14% for all new product financials.


-Calculate the total net present value for the project using a discount rate of 20%.

A)$312,500.00
B)$28,291.65
C)$753,291.65
D)$725,000.00
E)Do not have enough information to compute

Question 21

Fabricating Solutions is looking at the financials for a CNC machine. The expected life cycle for the machine is 6 years. The initial projected product design costs are $725,000. Fabricating Solutions typically uses a discount rate of 14% for all new product financials.


-For the project, how long will it take to recover the initial investments using a discount rate of 20%?

A)Less than two years
B)Between two years and three years
C)Between three years and four years
D)Between four years and five years
E)More than five years

Question 22

Fabricating Solutions is looking at the financials for a CNC machine. The expected life cycle for the machine is 6 years. The initial projected product design costs are $725,000. Fabricating Solutions typically uses a discount rate of 14% for all new product financials.


-Calculate the total net present value for the project using a discount rate of 25%.

A)$689,777.41
B)$300,000.00
C)$725,000.00
D)-$35,222.59
E)Do not have enough information to compute

Question 23

Fabricating Solutions is looking at the financials for a CNC machine. The expected life cycle for the machine is 6 years. The initial projected product design costs are $725,000. Fabricating Solutions typically uses a discount rate of 14% for all new product financials.


-The internal rate of return for the project is

A)Under 14%
B)Between 14% and 17%
C)Between 17% and 20%
D)Between 20% and 25%
E)Over 25%

Question 24

Fabricating Solutions is looking at the financials for a CNC machine. The expected life cycle for the machine is 6 years. The initial projected product design costs are $725,000. Fabricating Solutions typically uses a discount rate of 14% for all new product financials.


-The internal rate of return for the project is

A)14%
B)17%
C)20%
D)22.13%
E)25%

Question 25

-Calculate the total net present value for the project using a discount rate of 10%.

A)$61,448.39
B)$486,448.39
C)$425,000.00
D)-$32,000.00
E)Do not have enough information to compute

Question 26

-For the project, how long will it take to recover the initial investments using a discount rate of 20%?

A)Less than two years
B)Between two years and three years
C)Between three years and four years
D)Between four years and five years
E)More than five years

Question 27

-Calculate the total net present value for the project using a discount rate of 15%.

A)-$32,000.00
B)$448,843.54
C)$425,000.00
D)$23,843.54
E)Do not have enough information to compute

Question 28

-For the project, how long will it take to recover the initial investments using a discount rate of 15%?

A)Less than two years
B)Between two years and three years
C)Between three years and four years
D)Between four years and five years
E)More than five years

Question 29

-Calculate the total net present value for the project using a discount rate of 18%.

A)-$32,000.00
B)$425,000.00
C)$3,697.59
D)$428,697.59
E)Do not have enough information to compute

Question 30

-For the project, how long will it take to recover the initial investments using a discount rate of 18%?

A)Less than two years
B)Between two years and three years
C)Between three years and four years
D)Between four years and five years
E)More than five years

Question 31

-Calculate the total net present value for the project using a discount rate of 20%.

A)-$32,000.00
B)-$8,847.74
C)$416,152.26
D)$425,000.00
E)Do not have enough information to compute

Question 32

-The internal rate of return for the project is

A)Under 10%
B)Between 10% and 15%
C)Between 15% and 18%
D)Between 18% and 20%
E)Over 20%

Question 33

-The internal rate of return for the project is

A)22.13%
B)18.58%
C)15%
D)10%
E)20%

Question 34

-Calculate the total net present value for Project One using a discount rate of 12%.

A)$55,357.14
B)$11,684.12
C)$85,000.00
D)$96.684.00
E)Do not have enough information to compute

Question 35

-For Project One, how long will it take to recover the initial investments using a discount rate of 12%?

A)Less than one year
B)Between one year and two years
C)Between two years and three years
D)Between three years and four years
E)More than four years

Question 36

-Calculate the total net present value for Project One using a discount rate of 15%.

A)$92,453.50
B)$53,913.04
C)$85,000.00
D)$7,453.50
E)Do not have enough information to compute

Question 37

-For Project One, how long will it take to recover the initial investments using a discount rate of 15%?

A)Less than one year
B)Between one year and two years
C)Between two years and three years
D)Between three years and four years
E)More than four years

Question 38

-Calculate the total net present value for Project One using a discount rate of 20%.

A)$85,000.00
B)$5,304.78
C)$1,138.12
D)$51,666.67
E)Do not have enough information to compute

Question 39

-For Project One, how long will it take to recover the initial investments using a discount rate of 20%?

A)Less than one year
B)Between one year and two years
C)Between two years and three years
D)Between three years and four years
E)More than four years

Question 40

-The internal rate of return for Project One is

A)Under 12%
B)Between 12% and 15%
C)Between 15% and 18%
D)Between 18% and 20%
E)Over 20%

Question 41

-The internal rate of return for Project One is

A)22.13%
B)18.58%
C)15.64%
D)12.35%
E)20.98%

Question 42

-Calculate the total net present value for Project Two using a discount rate of 12%.

A)$11,252.33
B)$105,252.33
C)$94,000.00
D)$59,821.43
E)Do not have enough information to compute

Question 43

-For Project Two, how long will it take to recover the initial investments using a discount rate of 12%?

A)Less than one year
B)Between one year and two years
C)Between two years and three years
D)Between three years and four years
E)More than four years

Question 44

-Calculate the total net present value for Project Two using a discount rate of 15%.

A)$100,640.65
B)$94,000.00
C)$6,640.65
D)$58,260.87
E)Do not have enough information to compute

Question 45

-For Project Two, how long will it take to recover the initial investments using a discount rate of 15%?

A)Less than one year
B)Between one year and two years
C)Between two years and three years
D)Between three years and four years
E)More than four years

Question 46

-Calculate the total net present value for Project Two using a discount rate of 20%.

A)$94,000.00
B)$6,269.29
C)$93,757.72
D)-$242.28
E)Do not have enough information to compute

Question 47

-For Project Two, how long will it take to recover the initial investments using a discount rate of 20%?

A)Less than one year
B)Between one year and two years
C)Between two years and three years
D)Between three years and four years
E)More than four years

Question 48

-The internal rate of return for Project Two is

A)Under 12%
B)Between 12% and 15%
C)Between 15% and 18%
D)Between 18% and 20%
E)Over 20%

Question 49

-The internal rate of return for Project Two is

A)22.13%
B)19.81%
C)15.64%
D)12.35%
E)20.98%

Question 50

-Which of the following statement is TRUE?

A)The internal rates of return for both the projects are identical.
B)The internal rate of return for Project One is higher than the internal rate of return for Project Two.
C)The internal rate of return for Project One is lower than the internal rate of return for Project Two.
D)None of these statements are true.
E)Need additional information to answer the question