For a capital project to be accepted, the ________ should exceed the ________. A) IRR; hurdle rate. B) NPV; hurdle rate C) MIRR; IRR D) MIRR; NPV ANSWER A
Date: September 19th, 2020
Generally, increases in leverage result in increased return and risk. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Self-liquidating loans are intended merely to carry a firm through seasonal peaks in financing needs that are due primarily to buildups of accounts receivable and inventory. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
________ are liabilities for services received for which payment has yet to be made. A) Notes payable B) Accruals C) Accounts payable D) Accounts receivable ANSWER B
Date: September 19th, 2020
Survey data indicates that the profitability index method of project evaluation is preferred to: A) NPV. B) IRR. C) MIRR. D) None of the above. ANSWER D
Date: September 19th, 2020
Information for the sizing-up process for publicly traded firms can be obtained from: A) the firm’s annual report. B) the firm’s 10-K report filed with the Securities & Exchange Commission. C) industry reports. D) All of the above. ANSWER D
Date: September 19th, 2020
The financial management framework focuses on which three areas of decision-making? A) Operating, investing, and profitability. B) Profitability, financing, and investing. C) Investing, financing, and operating. D) Operating, financing, and profitability. ANSWER C
Date: September 19th, 2020
Your firm decides to increase equity by $1,000,000. Which of the following sets of transactions could NOT be appropriate ledger entries? A) Increase equity by $1,000,000 and increase long-term assets by $1,000,000 B) Increase equity by $1,000,000, decrease long-term debt by $500,000, and increase inventory by $500,000 C) Increase equity by $1,000,000 and increase inventory […]
Date: September 19th, 2020
Leverage results from the use of equity to magnify returns to a firm’s owners. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
What are the primary strengths and weaknesses of the Net Present Value method of capital budgeting? What will be an ideal response? ANSWER The major strength of the net present value method is that it takes into account the time value of money through the discount rate. It implicitly makes the reasonable assumption […]
Date: September 19th, 2020
