QUESTION 9 The Net Present Value method always uses the weighted average cost of capital as the present value interest rate (discount rate). True False

Q: The ______________on capital is called Cost of capital Select one: a. Average expected return b.…

A: Return on capital is called as cost of capital. Return for investors on capital invested by them is…

Q: Which one of the following statements related to capital gains is correct? Multiple Choice O O O O…

A: The capital gain of an investment is the percentage change in the value of the investment, whether…

Q: Problem 2:- How does inflation impact key ratios? What is the difference between book value and…

A:

Q: What do capital markets emphasize? a) Short term performance b) Earnings c) Both A and B d) Neither…

A: Capital Market: It is the  financial market  where  long-term debt or equity-backed securities are…

Q: Using the formula Interest = Principal x Rate x Time, if all elements are known except for the…

A: Simple interest rate is most easy and quick method method of interest calculation. Simple interest…

Q: Which of the following is a correct interpretation of r = i - pi?     Nominal interest rate is…

A: Several statements have been made about the real rate, nominal rate and inflation. We have to find…

Q: The present value of a lump sum future amount: O A. increases as the interest rate decreases. O B.…

A: The present value is defined as the discounted amount of the expected future value. The current…

Q: Effective interest amortization method uses which of the following rates to determine interest…

A: Under the effective interest method, the interest is calculated as yield to maturity multiplied by…

Q: What the different between rate interest و interest value ؟؟!!

A: The rate interest indicates the cost of borrowing or earnings on deposit in the percentage of the…

Q: None

A: With margin trading, traders can leverage their positions beyond their initial capital by borrowing…

Q: 7. Identify some economic factors that influence interest rates and explain the effects of each.

A: The interest rate can be defined as the rate used by borrower and lender in order to borrow or lend…

Q: Duration measures... Neither interest rate risk nor reinvestment risk. reinvestment risk. Both…

A: Duration can be intuitively defined for fixed-coupon bonds as the average maturity of all bond…

Q: Nominal values are measured in ________ and real values take account of

A: Given  Nominal values are measured ? Real values taken account of?

Q: The internal rate of return (IRR) is The same thing as the cost of capital. The discount rate that…

A: Capital budgeting is referred as the process of decision making which is used by companies to…

Q: Which option is an efficiency ratio? Select an answer: total asset turnover ratio

A: Ratio analysis is one of the technique used in management accounting. Several type of calculations…

Q: 27. What are the advantages of the arbitrage pricing theory over the capital asset pricing model?

A: Both the arbitrage pricing theory (APT) and the capital asset pricing model (CAPM) are frequently…

Q: Interest revenue for debt investments at fair value through other comprehensive income

A: IFRS 9 - Financial instruments deals with the calculation of interest income on debt investments.

Q: TRUE / FALSE The discount rate used to discount the value of future dollars can generally be…

A: The present value of an investment is the value of all future cash flows that have been discounted…

Q: The majority of financial instruments are valued using:  Group of answer choices  fair value…

A: Financial instruments are the assets that can be traded. Most of the financial instruments provide…

Q: The value of a sum after investing over one or more periods is called a) Discount Value b) None…

A: Using Time value of money concepts

Q: In part (b), why was the coupon payment added to the difference between the current and inital…

A: A coupon on a bond refers to the periodic interest payments that the bond issuer makes to the…

Q: 26. Real interest rate and real cash flows do not include A. equity effects B. debt effects C.…

A: Interest rate refers to the rate at which one party agrees to lend and the other party agrees to…

Q: None

A: The Capital Asset Pricing Model (CAPM) is a fundamental theory in finance that seeks to explain the…

Q: Both simple and compound interest represent the rate of return (ROR) on investments Select one: True…

A: Formula for simple interest = Principal x Interest x Time Formula for compound interest = Principal…

Q: Assume that the variables I, N, and PV represent the interest rate, investment or deposit period,…

A: Compound interest formula: Future value = Present value *(1+rate)^years. Answer: FV = PV x (1 + I)NN

Q: what if iternal rate of return is equal cost of capital ?what is decision

A: IRR or internal rate of return is the % return that the project generates.  IRR is the rate at which…

Q: Interest can be defined as the price of credit and also as a rate of return Question 21…

A: Statement : Interest can be defined as the price of credit and also as a rate of return.Answer:…

Q: 31. An inverted yield curve: a. exists when short-term interest rates are higher than long-term…

A: The yield curve is a graphical representation of yields vs its maturities.

Q: As per which approach of the capital structure, the overall cost of capital is unchanged because of…

A: As per the net operating income approach, the firm's overall cost of capital is not affected by the…

Q: The pure time value of money is known as the:   Multiple Choice   liquidity effect.   inflation…

A: The pure time value of money is the concept that money available today is worth more than the same…

Q: 13. Consider the following two statements: Statement 1: If nominal cash flows are used in…

A: Concept. according to fischer effect , (1+Nominal rate) = (1+ real rate) ( 1+ inflation rate). Thus…

Q: True/False. The optimal amount of debt produces the highest weighted average cost of capital. Group…

A: Solution- The optimal amount of the debt produced the highest weighted averagecost of capital.-False

Q: ding to the time value of money concept, also referred to as the present discounted value, is based…

A: Time value of concepts as the time period goes on due to the inflation goes on increasing and hence…

Q: Q.Regarding the concept of opportunity cost, one affirmation is false. Which one is it? a. is not…

A: Answer: a) Regarding the concept of opportunity cost, one affirmation is false. The false statement…

Q: Money market does not have any role in the development of capital market

A: Money market is a market which deals in short term securities like treasury bills, bills of…

Q: Which market variable is determined within the capital markets? C a. Property value c b. Market rent…

A: A capital market is a market where financial securities are traded. It channelizes surplus funds…

Q: everage is gained when which of the following exists? O Return on assets is greater than the…

A: Leverage is the borrowing from the market and there is interest to be paid on the debt and leverage…

Q: Why is the cost of capital sometimes referred to as a “hurdle rate”?

A: Cost of capital is the cost of financing a business, investment or a project. Cost of capital is…

Q: 4. There is a difference in return on Total Assets and the return on Total Equity. a. What is the…

A: a. The difference between the return on Total Assets and the return on Total Equity is that the…

Q: If we assume that inflation, the real cost of capital and the nominal cost of capital are always…

A: The objective of the question is to understand the relationship between inflation, the real cost of…

Q: Isn't the maturity value/principal is what we are looking for? F = Pr/(1-DT)?

A: Discount depends on the policy of the bank.

Q: The true economic yield produced by an asset summarized by the asset's: Multiple Choice…

A: The internal rate of return (IRR) is a metric used in financial analysis to estimate the…

Q: Which of the following statements is true? Select one: a. The nominal interest rate is always…

A: The interest rate preceding inflation is referred to as the nominal interest rate. Nominal could…

Q: The IRR represents O The highest interest rate at which the cost of capital is minimized O The…

A: Internal Rate of Return is the return where present value of cash inflows is equal to present value…