Solution Library


Investment Decisions Based on Net Present Value-Multiple Choice Question

Question Indicate as to whether the following statements are correct (yes) or incorrect (no): Accept-project even if NPV a) True b) False     ... Read More

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Investment Decisions Based on Net Present Value-Multiple Choice Question

Question Indicate as to whether the following statements are correct (yes) or incorrect (no): Reject-project even if NPV>0:    if the value of the additional negative-factors (real-obligations, negative-externalities, negative-extralities, taxation, pollution-penalties, public ba ... Read More

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Investment Decisions Based on Internal Rate of Return-Multiple Choice Question

Question Indicate as to whether the following statements are correct (yes) or incorrect (no): IRR is the discount rate at which NPV=0 a) True b) False     ... Read More

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Formulation of Rate of Return-Multiple Choice Question

Question Indicate as to whether the following statements are correct (yes) or incorrect (no): RoR = -1 + (VT/K0)(1/T) a) True b) False     ... Read More

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Formulation of Present Value of Cash Flows-Multiple Choice Question

Question Indicate as to whether the following statements are correct (yes) or incorrect (no): PV = sum of the discounted cash flows a) True b) False       ... Read More

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Formulation of Future Value of Cash Flows-Multiple Choice Question

Question Indicate as to whether the following statements are correct (yes) or incorrect (no): FV = sum of the reinvestment values of cash flows a) True b) False       ... Read More

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When Investors Accept Lower Returns on their Investments-Multiple Choice Question

Question Indicate as to whether the following statements are correct (yes) or incorrect (no): Due to synergy (economies of scale incubated through merger) the merged Firm-AB would have greater levels of growth rates, lower levels of shrinkage rates, greater levels of probability of growth, lower l ... Read More

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Efficient Working Capital Management-Multiple Choice Question

Question Indicate as to whether the following statements are correct (yes) or incorrect (no): Efficient working capital management is a key to success - a company must have sufficient cash flow in order to meet its short-term debt obligations and operating expenses. Swaps are a vehicle for reducin ... Read More

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Formulation of Weighted Average Cost of Capital-Multiple Choice Question

Question Indicate as to whether the following statements are correct (yes) or incorrect (no): WACC = r = wd* rd(1-t) + wp*rp + wd* rc a) True b) False       ... Read More

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Formulation of Capital Asset Pricing Model-Multiple Choice Question

Question Indicate as to whether the following statements are correct (yes) or incorrect (no): CAPM:    Ri -Rf = a + b(Rm-Rf) a) True b) False     ... Read More

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Formulation of Arbitrage Pricing Theory-Multiple Choice Question

Question Indicate as to whether the following statements are correct (yes) or incorrect (no): APT:   Ri -Rf = a + b1X1+ b2X2+ b3X3+…+ bnXn a) True b) False     ... Read More

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Generalised Model among CAPM and ATP-Multiple Choice Question

Question Indicate as to whether the following statements are correct (yes) or incorrect (no): APT is more general than CAPM since the former considers the effect of many factors. According to CAPM, investors’ utility depends on future wealth and all security returns are jointly normal. a) T ... Read More

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