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Subject
Finance
Date
Nov 24, 2024
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docx
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Uploaded by SargentRiverPolarBear33
21.
Question:
What does the term "capital budgeting" refer to in finance?
A) Budgeting for daily operational expenses
B) Planning for long-term investments in projects
C) Allocating funds for marketing activities
D) Controlling short-term liabilities
22.
Question:
In the context of risk management, what does the term "hedging" mean?
A) Increasing exposure to risk
B) Reducing or mitigating risk
C) Ignoring potential risks
D) Taking unnecessary risks for potential gains
23.
Question:
What is the formula for calculating the Net Present Value (NPV) of an investment?
A) Initial Investment - Final Value
B) Future Value / Present Value
C) Present Value of Cash Inflows - Present Value of Cash Outflows
D) Total Cash Inflows - Total Cash Outflows
24.
Question:
What role does the Federal Open Market Committee (FOMC) play in monetary policy?
A) Setting interest rates and implementing monetary policy
B) Regulating commercial banks
C) Enforcing consumer protection laws
D) Managing international trade agreements
25.
Question:
What is the purpose of a stock dividend?
A) Providing cash to shareholders
B) Distributing additional shares to existing shareholders
C) Repurchasing shares from the market
D) Paying off company debt
26.
Question:
In finance, what is the difference between a bull market and a bear market?
A) A bull market is characterized by falling prices; a bear market by rising prices
B) A bull market is characterized by rising prices; a bear market by falling prices
C) Both terms refer to rising prices
D) Both terms refer to falling prices
27.
Question:
What does the term "opportunity cost" mean in financial decision-making?
A) The cost of taking advantage of a financial opportunity
B) The potential loss of not choosing the next best alternative
C) The total cost of an investment project
D) The cost of borrowing money
28.
Question:
What financial metric measures a company's ability to generate profit from its equity?
A) Return on Assets (ROA)
B) Return on Investment (ROI)
C) Return on Equity (ROE)
D) Earnings Before Interest and Taxes (EBIT)
29.
Question:
What is the purpose of a 10-K report filed with the Securities and Exchange
Commission (SEC)?
A) Quarterly financial performance update
B) Annual financial disclosure by public companies
C) Monthly budget summary
D) Summary of shareholder meetings
30.
Question:
What is the concept of "time value of money" in finance?
A) The idea that money has a fixed value over time
B) The concept that money has different values at different points in time
C) The notion that time is a factor in the stock market
D) The assessment of the value of a company over time
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Related Questions
h. What does the term “risk” mean in the context of capital budgeting; to what extent can risk be quantified; and, when risk is quantified, is the quantification based primarily on a statistical analysis of historical data or on subjective, judgmental estimates?
i.
1. What are the three types of risk that are relevant in capital budgeting?
2. How is each of these risk types measured, and how do they relate to one another?
3. How is each type of risk used in the capital budgeting process?
j.
1. What is sensitivity analysis?
2. Perform a sensitivity analysis on the cost per unit, unit sales, and salvage value. Assume each of these variables can vary from its base-case, or expected, value by plus or minus 10%, 20%, and 30%. Include a sensitivity graph, and discuss the results.
3. What is the primary weakness of sensitivity analysis? What is its primary usefulness?
arrow_forward
Which of the following is not a method for incorporating risk analysis into capital budgeting?
a.
Positive/Negative analysis
b.
Monte Carlo simulations
c.
Scenario analysis
d.
Sensitivity analysis
e.
Decision tree models
arrow_forward
True or false? One way to address risk for a capital budgeting problem is to conduct scenario analysis
arrow_forward
Need accurate answer of this financial accounting Question
arrow_forward
Regarding risk levels, financial managers should:
A. evaluate investor's desire for risk.
B. avoid higher risk projects because they destroy value.
C. pursue higher risk projects because they increase value.
D. focus primarily on market fluctuations.
Note: Provide short answer for this account question
arrow_forward
Financial accounting: the payback period method
arrow_forward
Finding the present value of future cash flows is called and finding the future value of present cash flows is called
O A. analytics, tracking
B. capital budgeting, short-term budgeting
C. discounting, compounding
D. financial ratio analysis, financial statement analysis
O E. fundamental analysis, technical analysis
arrow_forward
accounting answer need
arrow_forward
Forecasting risk can be defined as the possibility that _____ will lead to incorrect decisions.
a. the inclusion of opportunity costs
b. erosion
c. errors in projected cash flows
d. the exclusion of sunk costs
e. net working capital costs
arrow_forward
1. Since capital budgeting decisions involve the estimation of a project’s future cash flows and the rate at which they should be discounted is still a relatively subjective process, the behavioral traits of managers still affect this process. Please explain this statement and suggest how managers can better improve their ability to eliminate biases in their forecasting.
arrow_forward
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Related Questions
- h. What does the term “risk” mean in the context of capital budgeting; to what extent can risk be quantified; and, when risk is quantified, is the quantification based primarily on a statistical analysis of historical data or on subjective, judgmental estimates? i. 1. What are the three types of risk that are relevant in capital budgeting? 2. How is each of these risk types measured, and how do they relate to one another? 3. How is each type of risk used in the capital budgeting process? j. 1. What is sensitivity analysis? 2. Perform a sensitivity analysis on the cost per unit, unit sales, and salvage value. Assume each of these variables can vary from its base-case, or expected, value by plus or minus 10%, 20%, and 30%. Include a sensitivity graph, and discuss the results. 3. What is the primary weakness of sensitivity analysis? What is its primary usefulness?arrow_forwardWhich of the following is not a method for incorporating risk analysis into capital budgeting? a. Positive/Negative analysis b. Monte Carlo simulations c. Scenario analysis d. Sensitivity analysis e. Decision tree modelsarrow_forwardTrue or false? One way to address risk for a capital budgeting problem is to conduct scenario analysisarrow_forward
- Need accurate answer of this financial accounting Questionarrow_forwardRegarding risk levels, financial managers should: A. evaluate investor's desire for risk. B. avoid higher risk projects because they destroy value. C. pursue higher risk projects because they increase value. D. focus primarily on market fluctuations. Note: Provide short answer for this account questionarrow_forwardFinancial accounting: the payback period methodarrow_forward
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