Poor capital structure decisions can result in a high cost of capital, thereby making some unacceptable investments acceptable. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Finding the equivalent annual annuity (EAA) is a good way to deal with projects with unequal lives and should only be used with mutually exclusive projects. Indicate whether the statement is true or false. ANSWER Answer: TRUE
Date: September 19th, 2020
The assignment of a discount rate to each project is an integral part of the NPV process. Indicate whether the statement is true or false. ANSWER Answer: TRUE
Date: September 19th, 2020
Apple, Inc. is considering Project A and Project B, which are two mutually exclusive projects with unequal lives. Project A is an eight-year project that has an initial outlay or cost of $140,000. Its future cash inflows for years 1 through 8 are the same at $36,500. Project B is a six-year project that has […]
Date: September 19th, 2020
Financing that matures in one year or less and has specific assets pledged as collateral is called ________. A) unsecured long-term financing B) unsecured short-term financing C) secured short-term financing D) secured long-term financing ANSWER C
Date: September 19th, 2020
To determine the current value of a project, discount all future cash flows to the present and add up all cash inflow and outflow. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: To determine the current value of a project, discount all future cash flows to the present, add […]
Date: September 19th, 2020
To be considered acceptable, a project must have an NPV greater than 1.0. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: To be considered acceptable, a project must have an NPV greater than $0.0
Date: September 19th, 2020
Meyer, Inc. is considering a five-year project that has an initial after-tax outlay or after-tax cost of $70,000. The future after-tax cash inflows from its project for years 1, 2, 3, 4 and 5 are all the same at $35,000. Meyer uses the net present value method and has a discount rate of 10%. Will […]
Date: September 19th, 2020
The ownership structures of most publicly traded U.S. nonfinancial firms is better characterized by the term: a. closely held b. diffuse ANSWER B
Date: September 19th, 2020
Collateral is typically required for a ________. A) secured short-term loan B) line of credit C) short-term, self-liquidating loan D) single-payment note ANSWER A
Date: September 19th, 2020
