The questions that have number or percents as answers need to have the

QUESTION

The questions that have number or percents as answers need to have the work shown. Everything can be done in excel (see attachents)

Document Preview:

FINC 330
Quiz 3
Spring 2013
MULTIPLE CHOICE and T/F.
Choose the one alternative that best completes the statement or answers the question.
1) ________ is at the heart of corporate finance, because it is concerned with making the best choices about project selection.
A) Capital budgeting B) Short-term budgeting
C) Payback period D) Capital structure
2) The ________ model is usually considered the best of the capital budgeting decision-making models.
A) Net Present Value (NPV) B) Discounted Payback Period
C) Profitability Index (PI) D) Internal Rate of Return (IRR)
TRUE/FALSE. Write ˜T if the statement is true and ˜F if the statement is false.
3) Capital budgeting decisions are typically long-term decisions.
MULTIPLE CHOICE:

4) The ________ model answers one basic question: How soon will I recover my initial investment?
A) IRR B) NPV
C) Payback Period D) Profitability Index
5) The initial outlay or cost is $1,000,000 for a four-year project. The respective future cash inflows for years 1, 2, 3 and 4 are: $500,000, $300,000, $300,000 and $300,000. What is the payback period without discounting cash flows?
A) About 4.50 years B) About 2.50 years C) About 2.67 years D) About 3.67 years
6) The capital budgeting decision model that utilizes all the discounted cash flow of a project is the ________ model, which is one of the single most important models in finance.
A) profitability index (PI) B) discounted payback period
C) internal rate of return (IRR) D) net present value (NPV)
7) In regard to the NPV method, which of the statements below is TRUE?

A) In the NPV Model, the net present value of an investment is the present value of all benefits (cash inflow) minus the present value of all costs (cash outflow) of the project.
B) In the NPV Model, the present cash flows are discounted at the rate r, the cost of capital.
C) In the NPV Model, most future cash flows are stated in¦

ANSWER:

CLICK REQUEST FOR  AN EXPERT SOLUTION