The IRR is the discount price that produces ___________a. One NPV equal to 1b. The smallest possible NPVc. The largest feasible NPVd. One NPV same to zero


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The ________ technique of resources budgeting is a ratio of the present value of benefits divided to the initial investment costa. Inner rate that returnb. Net existing valuec. Payback periodd. Benefit index
The ________ design is usually considered the ideal of the capital budgeting decision making modelsa. Net existing value (NPV)b. Discounted payback periodc. Profitability table of contents (PI)d. Inner rate that return (IRR)
Which of the following statements listed below is FALSE?a. If a agency has constrained capital, climate it have the right to only take on a restricted number of projectsb. Projects are mutually exclusive if choose one project eliminates the capacity to choose the various other projectc. Two projects are support exclusive if the acceptance of one project has actually no bearing top top the acceptance or refusal of the various other projectd. The NPV decision criterion is true when all tasks are independent, and the company has a sufficient resource of funds to expropriate all confident NPV projects
The net existing value the an invest is ______a. The existing value of all prices (cash outflows) of the projectb. The present value that all costs (cash outflow) minus the present value the all benefits (cash inflow) of the projectc. The present value of all services (cash inflows)d. The current value of all services (cash inflows) minus the current value of all costs (cash outflows) the the project
Which the the complying with statements listed below is TRUE that the payback duration method?a. That is biased versus projects through early-term payoutsb. The ignores the cash circulation after the initial outflow has actually been recoveredc. That incorporates time-value-of-money principalsd. It focuses on cash flows after the initial outflow has been recovered
The version determines at what point in time cash outflow is recovered by the matching future cash inflow. A. Net present value b. Buybackc. NPVd. Payback period
The benefit of ________ over ________ depreciation is the you can write off much more of your resources costs in the previously years. A. MACRS; straight-line depreciationb. MACRS; straight-line deductionsc. Straight-line depreciation; the modified accelerated cost recovery mechanism d. Straight-line depreciation; straight-line deductions
_________ are an audit measure the performance throughout a specific period of time, while _________ is the actual inflow or outflow of money. A. Cash flows; benefit b. Profits; cash flow c. Dividends; cash circulation d. Profits; a dividend
Which of the statements below is TRUE? a. Reduce in accounts payable constitute a source of cash flow due to the fact that you are using your companies to aid finance your business operations. B. The rise in working funding accounts necessary to support a project additionally provides for cost increases at the end of the project. C. Boost in working capital can be brought around by rise in inventory. D. Reduce in account receivables constitute a use of cash flow because you are helping your customers finance their purchases.
To gain the operation cash flow, offered the net income, we add back _______a. EBITb. Expense of goods sold c. Depreciation d. Taxes
__________ involve(s) a cash circulation that never ever occurs, but we require to add it as a expense or outflow since we room foregoing an additional alternative. A. Resources expendituresb. Sunk costsc. Possibility costsd. Cost recovery of divested assets
Whenever a new product competes versus a company\"s already existing products and also reduces the sales of those products, _________ occura. Erosion prices b. Working capital costs c. Opportunity costs d. Sunk costs
In capital budgeting, the ________ is the suitable discount price to use once calculating the NPV the an median risk project. A. Cost of same b. Expense of blame c. IRRd. WACC
An investment banker\"s fees are component of the _________ linked with issuing brand-new debt or equitya. Benefitsb. Flotation prices c. Revenues d. Opportunity costs
Which the the adhering to is the proper method to adjust the expense of blame to estimate the after-tax expense of debt? a. Rd ×(1+Tc) b. Rd ÷(1−Tc) c. Rd ÷(1+Tc) d. Rd ×(1−Tc)
The ideal rule for choosing projects once a firm has actually a restricted amount of funds is to accept the group of projects with the greatest combined ___________a. Number of projectsb. IRRc. NPVd. Time to completion
In resources budgeting, the proper decision rule for an average-risk task is to accept the _________ is greater than the WACCa. Cost of equityb. NPVc. IRRd. Expense of debt
Generally speaking, when the info is available, investors like to use ________ quite than _________ when evaluating a firm. A. Sector values; publication values b. Past data; existing data c. Publication values; industry values d. Existing data; market values
Pricing desired stock is most similar to pricing ________. A. A zero-coupon bondb. A perpetuityc. Constant growth common stock d. A three-month Treasury bill
Which of the following statements below is TRUE?a. The rise in working resources accounts vital to assistance a project also provides for expense increases in ~ the end of the projectb. Reduce in account receivables constitute a usage of cash flow due to the fact that you are helping her customers finance their purchasesc. Diminish in account payable constitute a resource of cash flow due to the fact that you room using your suppliers to help finance their purchased. Boost in working resources can be brought around by rise in inventory
Operating Cash flow (OCF) is same to what?a. EBIT - Depreciation - Taxesb. EBIT + Depreciation - Taxesc. EBIT + Depreciation + Taxesd. EBIT - Depreciation + Taxes
_____________ that a job are those the have currently been incurred and also are irrelevant to our existing financing optionsa. Opportunity costsb. Sunk costsc. Erosion costsd. Working funding costs
The __________ model answers one straightforward question: how soon will certainly I recoup my early investment?a. Payback periodb. NPVc. IRRd. Profit index
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