Please answer the following MCQs and T or Fs from 1 till 14 Question 8Question 11A firm with a 14 percent WACC is evaluating twoprojects for this year's capital budget. After-taxcash flows, including depreciation, are asfollows?No conflict between the results of Net PresentValue and IRR, with respect to independentprojects.Select one:Year Project (A) Project (B)$(6000)$2000$2000$(18000)$5600$5600True2$2000$2000$2000$5600$5600$56003False45Question 12The payback period for project A is equal toA firm with a 14 percent WACC is evaluating twoprojects for this year's capital budget. After-taxcash flows, including depreciation, are asa. 3.214 yearsfollows?b. 4.580 yearsYearProject (A) Project (B)$(6000)$2000$2000с. З уears$(18000)$56001$5600$5600$56002d. 4.167 years$2000$2000$20004Question 95$5600The discounted payback period for project B isA firm with a 14 percent WACC is evaluating twoprojects for this year's capital budget. After-taxcash flows, including depreciation, are asfollows?equal toа. З уearsb. 4.580 yearsYear Project (A) Project (B)O $ (6000)1 $20002 $2000$(18000)$5600$5600c. 4.167 years3 $2000$5600d. 3.214 years4 $2000$56005 $2000$5600Question 13The discounted payback period for project A isequal toIgnoring time value of money is one of theweaknesses for payback period method.Select one:а. З уеarsTrueb. 4.167 yearsFalsec. 4.580 yearsd. 3.214 yearsQuestion 14The cost of capital is used primarily to makedecisions that involve raising new capital. So,focus onWACC?Question 10----- when calculatingFactors that influence a company's compositeWACC includes all of the following, except?a. all of the listed choicesa. The firm's capital structure anddividend policy.b. marginal costsb. Specific project or division riskc. historical costsc. The firm's investment policy.Firms with riskier projectsgenerally have a higher WACCd. None of the listed choicesd. Market conditions.O O o OO O O OO O OO O O O Question 1Question 5According to mutually exclusive projects, no limitfor the number of accepted projects.A firm with a 15 percent WACC is evaluating twoprojects for this year's capital budget. After-taxcash flows, including depreciation, are asfollows?Select one:Year Project (E) Project (F)$(36000)$10500$10500True$(12000)$50001False$50003$5000$5000$10500$105004Question 2The IRR for project E is equal toA firm with a 14 percent WACC is evaluating twoprojects for this year's capital budget. After-taxcash flows, including depreciation, are asfollows?a. 12.58 %b. 2.409 %Year Project (A) Project (B)$(18000)$5600$5600c. 1.258 %$(6000)$20002$2000d. 24.09%$2000$20003$5600$56004$2000$5600Question 6The payback period for project B is equal toA firm with a 14 percent WACC is evaluating twoprojects for this year's capital budget. After-taxcash flows, including depreciation, are asfollows?a. 4.580 yearsb. 3 yearsYearProject (A) Project (B)$(6000)$2000$2000$2000$2000$(18000)$5600$5600$56001c. 3.214 years34$5600d. 4.167 years5$2000$5600Question 3If Projects A and B were independent, accordingto NPV the company should acceptNet present value is the length of time requiredfor an investment's cash flows, discounted at thea. None of the listed choicesinvestment's cost of capital, to cover its cost.Select one:b. Project Bc. Projects A&BTrued. Project AFalseQuestion 4Question 7The CAPM formula for calculating cost ofretained earnings Ks is?Issuing new common stock may send a negativesignal to the capital markets, which may depressstock price.a. Ks= kRF + (kM – kRF)bSelect one:b. ks= kd + RP.Truec. All of the listed choicesFalsed. ks = D1/PO + g.O O O OO O O OO O O OO OO OO O

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Question 8 Question 11 A firm with a 14 percent WACC is evaluating two projects for this year's capital budget. After-tax cash flows, including depreciation, are as follows? No conflict between the results of Net Present Value and IRR, with respect to independent projects. Select one: Year Project (A) Project (B) $(18000) $5600 $5600 $5600 $5600 $(6000) $2000 1 True 2 $2000 $2000 $2000 $2000 3 False 4 5 $5600 Question 12 The payback period for project A is equal to A firm with a 14 percent WACC is evaluating two projects for this year's capital budget. After-tax cash flows, including depreciation, are as follows? a. 3.214 years b. 4.580 years Year Project (A) Project (B) $(6000) $2000 $2000 $2000 $2000 $2000 $(18000) $5600 $5600 $5600 $5600 $5600 c. 3 years 1 d. 4.167 years 2 3 Question 9 5 The discounted payback period for project B is equal to A firm with a 14 percent WACC is evaluating two projects for this year's capital budget. After-tax cash flows, including depreciation, are as follows? а. З уеars b. 4.580 years Year Project (A) Project (B) o $(6000) $(18000) $5600 $5600 $5600 $5600 1 $2000 c. 4.167 years 2 $2000 3 $2000 4 $2000 5 $2000 d. 3.214 years $5600 Question 13 The discounted payback period for project A is equal to Ignoring time value of money is one of the weaknesses for payback period method. Select one: a. 3 years True b. 4.167 years False c. 4.580 years d. 3.214 years Question 14 The cost of capital is used primarily to make decisions that involve raising new capital. So, focus on ----- WACC? Question 10 ------- when calculating Factors that influence a company's composite WACC includes all of the following, except? ? a. all of the listed choices a. The firm's capital structure and dividend policy. b. marginal costs b. Specific project or division risk c. historical costs d. None of the listed choices c. The firm's investment policy. Firms with riskier projects generally have a higher WACC d. Market conditions. O O O O O O O O O O O O O O O O O O O O