3 . Please estimate the stock price for year ' s two and three , assuming that the current PE multiple remains constant for each of the two forecasted years . ( 6 points ). ========================================================= FIN 571 Week 5 Connect Problems
per year for year ' s two and three . Please show the earnings per share for each of the three years . ( 10 points )
3 . Please estimate the stock price for year ' s two and three , assuming that the current PE multiple remains constant for each of the two forecasted years . ( 6 points ). ========================================================= FIN 571 Week 5 Connect Problems
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1 . The difference between the present value of an investment ’ s future cash flows and its initial cost is the : payback period . internal rate of return . profitability index . discounted payback period . net present value .
2 . Which statement concerning the net present value ( NPV ) of an investment or a financing project is correct ? An investment project that has positive cash flows for every time period after the initial investment should be accepted . Any type of project should be accepted if the NPV is positive and rejected if it is negative . A financing project should be accepted if , and only if , the NPV is exactly equal to zero . Any type of project with greater total cash inflows than total cash outflows , should always be accepted . An investment project should be accepted only if the NPV is equal to the initial cash flow .
3 . The primary reason that company projects with positive net present values are considered acceptable is that : they create value for the owners of the firm .