Business Finance MPQ 0.0 / 5 ? AccountingBusiness FinanceUniversityNone Created by: mustafaali1838Created on: 13-01-20 19:02 Cash flows occurring in different periods should not be compared unless: The flows have been discounted to a common date 1 of 17 What happens over time to the real cost of purchasing a home if the mortgage payments are fixed in nominal terms and inflation is in existence? The real cost is decreasing 2 of 17 Corporate financing comes ultimately from: Savings by households and foreign investors 3 of 17 The opportunity cost of capital: Is the minimum acceptable rate of return on a project 4 of 17 According to the NPV rule, all projects should be accepted if NPV is positive when discounted at the Opportunity cost of capital 5 of 17 A tax shield is equal to the reduction in: Total tax liability resulting from a tax-deductible expense 6 of 17 The recovery of an additional investment in working capital is assumed to: Occur at the end of a project's life 7 of 17 Positive NPV projects exist because: Firms hold competitive advantage 8 of 17 If sensitivity analysis concludes that the largest impact on profits would come from changes in the sales level, then: Additional marketing analysis may be beneficial before proceeding 9 of 17 If a firm earns the WACC as an average return on its average-risk assets, then: All investors will earn their minimum required rate of return 10 of 17 When a corporation decides to issue long-term debt in order to pay for the acquisition of real assets, it has made a: Financing decision 11 of 17 The value of a proposed capital budgeting project depends on the: Incremental cash flows produced 12 of 17 In capital budgeting analysis, an increase in working capital can be shown as: An outflow at the beginning and an equal inflow at the end of the project 13 of 17 The greater the ratio of variable costs to sales, the: More units must be sold to cover fixed charges 14 of 17 One common reason for partnerships to convert to a corporate form of organization is that the partnership: Faces rapidly growing financing requirements 15 of 17 Compared to buying stocks and bonds directly, what are the advantages of investing in a mutual fund? Mutual funds are efficiently diversified and professionally managed 16 of 17 When managers cannot determine whether to invest now or wait until costs decrease later, the rule should be to: Invest at the date that gives the highest NPV today 17 of 17
THE INTERNATIONAL FINANCE CORPORATION IN ITS GOOD PRACTICE HANDBOOK FOR COMPANIES DOING BUSINESS IN EMERGING MARKETS 0.0 / 5
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