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.