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FIN 100 Quiz 8

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FIN 100 Quiz 8

Internal rate of return (IRR) and net present value (NPV) methods:

The method that calculates the ratio of the present value of the positive cash flows of a project to the absolute value of the present value of the negative cash flows is called the:

Which one of the following best explains the impact on a firm that accepts a project with a negative NPV?

The payback period concept is best explained by which of the following?

The internal rate of return concept is best explained by which of the following?

The ________ is the discount rate that equates the present value of the cash inflows with the initial investment.

The final step in the capital budgeting process is

Capital budgeting is

With independent projects, NPV and IRR provide identical accept/reject decisions. If, however, you have two mutually exclusive projects to evaluate, the most accurate thing you could say about the eventual results is that:

The time required for the cumulative cash flows from a project to equal zero is called the:

A firm’s mix of debt and equity defines the firm’s:

Other factors being constant, higher fixed operating costs mean:

Of the components shown below, which is least likely to be of value in calculating the cost of preferred stock?

Which of the following is a correct way to calculate degree of combined leverage?

What should be the relation between the target capital structure for a firm and the firm’s optimum capital structure?

The hypotheses that states that firms try to time the market by issuing stocks when stock prices are high and repurchasing shares when prices are low is called:

A decrease in the debt ratio will normally have no effect on:

Which of the following is a different concept from the other three?

The estimate of how quickly a firm may grow by maintaining a constant mix of debt and equity is called:

In calculating the cost of new common stock using the constant dividend growth model, it is important that the __________ are subtracted from the price of the stock.