Net present value and internal rate of return capital budgeting decisions can differ because A) the initial costs of the capital outlays differ. B) the cash flow streams differ. C) the discount rates differ for different time periods. D) All of the above ANSWER D
Date: September 9th, 2020
A major advantage of the ________ production function is that it can be easily transformed into a linear function, and thus can be analyzed with the linear regression method. A) cubic B) power C) quadratic D) None of the above ANSWER B
Date: September 9th, 2020
A commodity or service whose consumption by one person does not preclude others from also consuming it is called a A) private good. B) public good. C) Giffen Good. D) Coase Good. ANSWER B
Date: September 9th, 2020
Levying a tariff on an imported good A) shifts the demand curve down for the good. B) shifts the supply curve up for the good. C) Both A and B. D) Not enough information to determine. ANSWER B
Date: September 9th, 2020
A company’s capital structure is made up of 40% debt and 60% common equity (both at market values). The interest rate on bonds similar to those issued by the company is 8%. The cost of equity is estimated to be 15%. The income tax rate is 40%. The company’s weighted cost of capital is A) […]
Date: September 9th, 2020
________ functions are very useful in analyzing production functions, which exhibit both increasing and decreasing marginal products. A) Cobb-Douglas B) Straight-line C) Quadratic D) Cubic ANSWER D
Date: September 9th, 2020
Asymmetric information will always cause A) efficiency problems. B) equity problems. C) Both A and B. D) None of the above. ANSWER B
Date: September 9th, 2020
The above figure shows the cost curves for a typical firm in a market and three possible market supply curves. If there are 100 identical firms, the market supply curve is best represented by A) curve A. B) curve B. C) curve C. D) either curve A or B, but definitely not C. ANSWER […]
Date: September 9th, 2020
Compared to free trade, a ban on imports of a good A) increases the domestic price of the good. B) decreases consumer surplus. C) results in a deadweight loss. D) All of the above. ANSWER D
Date: September 9th, 2020
Capital rationing A) exists when a company sets an arbitrary limit on the amount of investment it is willing to undertake, so that not all projects with an NPV higher than the cost of capital will be accepted. B) generally does not permit a company to achieve maximum value. C) seems to occur quite frequently […]
Date: September 9th, 2020
