MCQ'S: 36) n) __ is a cash outlay that is expected to generate a flow of future cash benefits lasting longer than 1 year. a.operating expenditure b.depreciation charge . c.capital gain d.capital expenditure
MCQ'S:
36) n) __ is a cash outlay that is expected to generate a flow of future cash benefits lasting longer than 1 year.
a.operating expenditure
b.depreciation charge .
c.capital gain
d.capital expenditure
37) Basin Manufacturing (40% marginal tax rate) is considering a plant expansion project. The equipment will cost $100,000 and will require an additional $10,000 for delivery and installation. The expansion also will require Basin to increase immediately its net working capital by $25,000. The expansion is expected to generate revenues of $150,000 per year. Calculate the project's net investment.
a.$125,000
b.$81,000
c.$135,000 .
d.$131,000
38) a
a.similar to that for bonds
b.equal to Dp/Pn
c.less than Dp/Pn
d.equal to Dp less flotation costs .
39) The Percolator Company has the following capital structure:
Common stock ($5 par, 250,000 shares) $1,250,000
Contributed capital in excess of par $5,000,000
The company declares a 10% stock dividend. The pre-stock dividend market price of the company's stock is $50.
Determine the balance in the common stock account after the stock dividend.
a.$2,500,000
b.$1,250,000
c.$1,375,000
d.$125,000
40) All of the following are methods of adjusting a project for total risk EXCEPT ___.
a.simulation analysis
b.sensitivity analysis
c.the certainty equivalent approach .
d.the carpe diem approach
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