Managers typically look at the initial outlay for the project as its capital expenditure and determine ________ from this capital expenditure. A) interest expenses B) dividends C) depreciation D) CEO expenses ANSWER Answer: C
Date: September 19th, 2020
In general, non-U.S. companies have much higher debt ratios than their U.S. counterparts because financial markets are much more developed in the United States than elsewhere. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
All of the following were mentioned in the text as means by which the manager of a firm may decrease the his or her personal exposure to the firm’s risk (on a self-serving basis) EXCEPT: a. excessive corporate diversification b. bias toward investments with near-term payoffs c. securing his or her lifetime compensation with a […]
Date: September 19th, 2020
________ involve(s) a cash flow that never occurs, but we need to add it as a cost or outflow of a new project. A) Cost recovery of divested assets B) Capital expenditures C) Sunk costs D) Opportunity costs ANSWER Answer: D
Date: September 19th, 2020
________ cash flow is the increase in cash generated by a new project above the current cash flow without the new project. A) Future B) Current C) Discounted D) Incremental ANSWER Answer: D
Date: September 19th, 2020
________ of a project are those that have already been incurred and cannot be reversed. A) Erosion costs B) Opportunity costs C) Sunk costs D) Working capital costs ANSWER Answer: C
Date: September 19th, 2020
Which of the below statements is FALSE? A) Whenever a new product competes against a company’s already existing products and reduces the sales of other products, opportunity costs occur. B) Erosion can provide cost savings. C) A synergy gain occurs when a new product can be introduced that complements another current product so that sales […]
Date: September 19th, 2020
Whenever a new product competes against a company’s already existing products and reduces the sales of the other products, net working capital increases occur. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Whenever a new product competes against a company’s already existing products and reduces the sales of these […]
Date: September 19th, 2020
If the company had a large depreciation expense during the period, the income statement could show a loss for the period, even though the cash account may have grown during the same period. Indicate whether the statement is true or false. ANSWER Answer: TRUE
Date: September 19th, 2020
Effective capital structure decisions can lower the cost of capital, resulting in higher NPVs and more acceptable projects, thereby increasing the value of a firm. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
