FIN3701 MULTIPLE CHOICE QUESTIONS

Document Content and Description Below

FIN3701 MULTIPLE CHOICE QUESTIONS 1. A company would accept a project with a net present value of zero because the… 2. All the following are the weaknesses of the payback period except 3... . Cash flows that could be realized from the best alternative use of owned asset are called…. 4. In developing the cash flows for an expansion project, the analysis is the same as the analysis for replacement projects where …. 5. The evaluation of capital expenditure proposals to determine whether they meet the company’s minimum acceptable criteria are called …... 6. The amount by which the required discount rate exceeds the risk-free rate is called the …. 7. Some companies use the payback period as a decision criterion as a supplement to sophisticated decision techniques because …. 8. Which of the following rules are essential to successful cash flow estimation, and ultimately, to successful capital budgeting? 9. The book value of an asset is equal to the …... 10. The cash flows of any project having a conventional pattern include all the following basic components except …... 11. Net cash flow equals …. 12. Define payback period …... 13. Discounted payback equals …... 14. Traditional payback equals ……. 15. Internal rate of return equals ………… 16. Net present value equals ………... 17. Under normal circumstances, the weighted average cost of capital is used as the firm's required rate of return because ………. 18. Depreciation must be considered when evaluating the incremental operating cash flows associated with a capital budgeting project because …. 19. "When evaluating a new project, the firm should consider all of the following factors except:" " 20. How do most firms deal with the risks of projects when making capital budgeting decisions? 21. The marginal cost of capital as more capital is raised during a given period 22. "If a company uses the same discount rate for evaluating all projects, which of the following results is likely?" ......................................................................................continued........................................................................................ [Show More]

Last updated: 1 year ago

Preview 1 out of 16 pages