A) Inflation rate; B) Interest rate; C) Not doing something; 2. People prefer to receive cash: A) Sooner than later; B) Later than sooner; C) Doesn't matter when; 3. Financial decisions must be based on: A) Risk assessment; B) Time adjusted cash flows; C) Inflation assessment; -. Future vale is equal: A) Initial investment X (1+ k)"; 3) Initial investment X (1+ k.n); C) A+B The term (1+k) is known not 11. The additional value added to the current value of the corporation by accepting a particular project is known as: A) Net profit; B) Net present value; C) A+B; 12. From the decision making standpoint, the financial managers should selected the project that have: A) Negative NPV; B) Positive NPV; C) NPV = 0; 13. The Internal rate of return of a project is defined as the discounted rate that makes a project's NPV: A) Positive; B) Equal to 0; C) Negative; 14 The financial managers should only accept
A) Inflation rate; B) Interest rate; C) Not doing something; 2. People prefer to receive cash: A) Sooner than later; B) Later than sooner; C) Doesn't matter when; 3. Financial decisions must be based on: A) Risk assessment; B) Time adjusted cash flows; C) Inflation assessment; -. Future vale is equal: A) Initial investment X (1+ k)"; 3) Initial investment X (1+ k.n); C) A+B The term (1+k) is known not 11. The additional value added to the current value of the corporation by accepting a particular project is known as: A) Net profit; B) Net present value; C) A+B; 12. From the decision making standpoint, the financial managers should selected the project that have: A) Negative NPV; B) Positive NPV; C) NPV = 0; 13. The Internal rate of return of a project is defined as the discounted rate that makes a project's NPV: A) Positive; B) Equal to 0; C) Negative; 14 The financial managers should only accept
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Transcribed Image Text:1. The opportunity costs are related with:
A) Inflation rate;
B) Interest rate;
C) Not doing something;
2. People prefer to receive cash:
A) Sooner than later;
B) Later than sooner;
C) Doesn't matter when;
3. Financial decisions must be based on:
A) Risk assessment;
B) Time adjusted cash flows;
C) Inflation assessment;
4. Future vale is equal:
A) Initial investment X (1 + k)" ;
B) Initial investment X (1+k.n);
C) A+B
5. The term (1 + k)" is known as:
A) Present value interest factor;
B) Future value interest factor;
C) Risk assessment factor;
1
(1+ p)"
A) Present value interest factor;
B) Future value interest factor;
C) Risk assessment factor;
6. The term
is known as:
7. A present value problem can involve:
A) Series of future cash flows;
B) Single future cash flow;
C) A+B
8. Present value of series of future cash flow is
presented in equation:
n
A) PV = CF₁
t=1
n
B) PV = Σ
t=1
1
(1+p)"
CFt
(1+p)"
;
C) A+B
9. Cash flows directly attributed to the evaluating
projects are known as:
A) Net working capital;
B) Incremental cash flows;
C) Nonincremental cash flows;
10. Net working capital is equal to:
A) Current assets + fixed assets;
11. The additional value added to the current value
of the corporation by accepting a particular project
is known as:
A) Net profit;
B) Net present value;
C) A+B;
12. From the decision making standpoint, the
financial managers should selected the project that
have:
A) Negative NPV;
B) Positive NPV;
C) NPV = 0;
13. The Internal rate of return of a project is defined
as the discounted rate that makes a project's NPV:
A) Positive;
B) Equal to 0;
C) Negative;
14. The financial managers should only accept
those projects
IRR
is:
A) IRR>1;
B) IRR>0;
C) IRR<1;
15. The ratio of the present value of the project's
future cash flows to its cost is known as:
A) Pay back period;
B) Profitability index;
C) A+B;
whose
16. A delay in receiving cash results in
opportunities to make money.
17. Time value of money refers to the fact that
cash receipts are more valuable
they are received.
18. Interest paid on both the principal and the
accumulated interest left in the investment is known
as
19. In present value problem we have to determine
the
unit amount today, that is
cash flow.
equivalent to the
20. A capital
budget is the schedule of
or fixed assets, projects selected by
the financial managers for
purposes.
21. What does the net present value of a project tell
a financial manager?
Expert Solution
Step 1 Given
(Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and specify the other subparts (up to 3) you’d like answered.)
Explanations have been provided to the following questions:
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education