E. All choices are incorrect 21-Which of the following statements is true? A. Investments that have a positive net present value should be considered for acc B. Investments that yield a positive internal rate of return should be accepted C. Investments that pay back in five years or less should always be accepted D. Investments that have a positive net present value should always be accepted E. All choices are incorrect dra?" ora best

E. All choices are incorrect 21-Which of the following statements is true? A. Investments that have a positive net present value should be considered for acc B. Investments that yield a positive internal rate of return should be accepted C. Investments that pay back in five years or less should always be accepted D. Investments that have a positive net present value should always be accepted E. All choices are incorrect dra?" ora best

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

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Commitment to prior investments escalates and makes it harder to abandon prior investments even if it may not make rational sense is called __________ . Multiple Choice sunk cost fallacy committed cost fallacy commitment cost fallacy cost abandonment fallacy
1. Which of the following statements are true?a. The value of any investment is based on the cash flows it is expected to generate in the future.b. Investors are not generally risk averse.c. Uncertain cash flows are preferred to certain cash flows.d. All of the above are true.e. None of the above are true. 2. A basic knowledge of finance will help you with your personal investments by helping you understanda. how to accurately predict changes in the short-term interest rates.b. how to determine the optimal dividend policy for each firm.c. how to determine which technology is most likely to be accepted by consumers.d. how to review companies and industries to determine their prospects for future growth and therisk inherent in those companies and industries.e. how to predict the growth in sales for the firm. 3. Which of the following events would make it more likely that a company would choose to call itsoutstanding callable bonds?a.A reduction in market interest rates.b.The company's…
show you work which of the following is not correct in regard to trading investments? a. They are held with the intention of selling them in a short period of time. b. Unrealized holding gains and losses are reported as part of net income. c. Any discount or premium is nott amortized d. All of these answer choices are correct.
When comparing NPV and IRR, which is incorrect? With NPV, the discount rate can be adjusted to take into account increased risk and the uncertainty of cash flows With IRR, cash flows can be adjusted to account for risk NPV can be used to compare investments of various size or magnitude Both NPV and IRR can be used for screening decisions
41. Direct financing allows a borrower to: A. easily assess a lender’s level of default risk B. diversify their funding sources C. match amounts and maturity of investments with borrowers D. lower search and transaction costs
Give typing answer with explanation and conclusion Please could you anwser it with true or false : Q1)Risk-neutral evaluation assumes that the expected return on the underlying asset is the risk-free rate and discounts at the risk-free rate.
Despite the different methods that may be used by investors to evaluate .4 the expected return, you should always adjust your return by inflation. .Assess the extent to which you agree with the statement
Which of the following is TRUE? High-risk investments always have high returns If you invest in a risky investment, you are guaranteed to have a high return. On average, an investor will earn high returns on a low-risk investment On average across investments and over time, riskier investments have higher returns. A high-risk investment will never have a total loss.
ion Given r and t greater than zero: I. Present value interest factors are less than one. II. Future value interest factors are less than one. III. Present value interest factors are greater than future value interest factors. IV. Present value interest factors grow as t grows, provided r is held constant. Select one: O a. II and Ill only Ob. II and IV only O c. I and III only O d. I only Oe. I and IV only
There are some cases in which the present worth (( PW )) of an investment is positive while its annual worth ((AW )) is negative. Select one: O True O False
LO1 Show the reasons why the net present value criterion is the best way to evaluate proposed investments. LO2 Discuss the payback rule and some of its shortcomings.

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