Business Finance 3

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What level of management is responsible for originating capital budgeting proposals?
All levels of management
1 of 5
WACC can be used to determine the value of a firm by discounting the firm's:
Free cash flows
2 of 5
Firms that make investment decisions based on the payback rule may be biased toward rejecting projects:
With long lives
3 of 5
The statement ‘We’ve got too much invested in that project to pull out now’ possibly illustrates the need to:
Be reacquainted with the concept of sunk costs
4 of 5
A firm’s WACC:
Is a benchmark discount rate that is adjusted for the riskiness of each project
5 of 5

Other cards in this set

Card 2

Front

WACC can be used to determine the value of a firm by discounting the firm's:

Back

Free cash flows

Card 3

Front

Firms that make investment decisions based on the payback rule may be biased toward rejecting projects:

Back

Preview of the front of card 3

Card 4

Front

The statement ‘We’ve got too much invested in that project to pull out now’ possibly illustrates the need to:

Back

Preview of the front of card 4

Card 5

Front

A firm’s WACC:

Back

Preview of the front of card 5

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