Under a “secret warranty” the owner receives reimbursement for defects only if he or she A) promises not to tell other owners. B) complains to the dealer or manufacturer. C) enters arbitration over the defect. D) brings the dealer or manufacturer to court. ANSWER B
Date: September 19th, 2020
________ is the process of deciding which long-term investments or projects a firm will acquire using the long-term funds a firm has available. A) Investment analysis B) Capital budgeting C) Capital marketing D) Liability management E) Corporate governance ANSWER B
Date: September 19th, 2020
Which of the following statements is false? A) The NPV will be positive if the IRR is less than the cost of capital. B) If the multiple IRR problem does not exist, any independent project acceptable by NPV method will also be acceptable by the IRR method. C) When IRR = k (the cost of […]
Date: September 19th, 2020
Most errors committed in capital budgeting analysis occur during what stage? A) Adjusting for the time value of money B) Calculating net present value C) Estimating relevant cash flows D) Finding the payback period E) Interpreting the results of the analysis ANSWER C
Date: September 19th, 2020
The most widely used capital budgeting technique is: A) the payback period. B) net present value. C) internal rate of return. D) the profitability index. E) modified internal rate of return. ANSWER B
Date: September 19th, 2020
An NPV profile: A) graphs the NPV at a variety of discount rates. B) graphs the NPV at a variety of internal rates of return. C) graphs the NPV at a variety of modified internal rates of return. D) graphs the payback period at a variety of discount rates. E) compares the NPV and the […]
Date: September 19th, 2020
An advantage of the net present value (NPV) method is that it: A) does not employ time value of money techniques. B) is easy to use when available capital or resources are limited. C) does not rely on the cost of capital. D) provides its users with a clear decision criterion. E) provides a “bang […]
Date: September 19th, 2020
Ben Fasby has taxable income of $7,000, and the following tax rate schedule is applicable: Taxable Income Tax Rate $0 to $3,400 0 % $3,400 to $5,500 12 % $5,500 to $7,600 14 % Ben’s tax liability is A) $980. B) $210. C) $462. D) $870. ANSWER C
Date: September 19th, 2020
Marginal analysis A) only considers costs that vary with the relevant decision. B) considers all historical costs. C) only considers some historical costs. D) considers all past and future costs. ANSWER A
Date: September 19th, 2020
Concerning an adjustable rate loan, which of statements is false? A) Lenders are required to describe circumstances that will lead to rate changes. B) Lenders are required to provide examples of the payment changes that may occur. C) The APR will reflect the interest payments you will actually incur over the life of the mortgage. […]
Date: September 19th, 2020
