Statements: I. An internal rate of return that is greater than the cost of capital ensures that the company earns above its required return. II. This (I) results to greater value of the company and therefore the wealth of its owners. Group of answer choices Statement II is true. Both statements are true Both statements are false Statement I is true

Statements: I. An internal rate of return that is greater than the cost of capital ensures that the company earns above its required return. II. This (I) results to greater value of the company and therefore the wealth of its owners. Group of answer choices Statement II is true. Both statements are true Both statements are false Statement I is true

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Mf1.
QUESTION 8 Which of the following statements is true? O A. The DuPont Identity is used to calculate Return on Assets. B. A company can imporve their P/E ratio by improving their EPS. O C. A Market to Book ratio greater than 1 always means the stock is undervalued. D. All of the statements are false.
am. 375.
QUESTION 4 When evaluating a company's liquidity, O a. The quick ratio is typically more conservative than the current ratio. O b. Ratio analysis is not helpful. O c. The current ratio and the quick ratio are two names for the same thing. O d. The current ratio is always more consevative than the quick ratio.
8. Each of the following is sometimes listed as a reasonable objective for a firm: (a) maximize profit (accounting income), (b) maximize sales (or share of the market), (c) maximize the value of a share of common stock t time periods from now, (d) ensure continuity of existence, (e) maximize the rate of growth, (f) maximize future dividends. Discuss each item and the extent of its relevance to the making of investment decisions.
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12 inance Which of the following is correct as it relates to using Excel Solver in case of capital rationing? Group of answer choices One creates binary variables that have the value of either 1 (chosen) or 0 (not chosen). One sets the objective such as to maximize the net present value of chosen investments. One sets the constraint such as the total investments being greater than the amount of capital available.
Managers should ideally strive to maximise O a Earnings per share Ob Market price per share Oc Return on equity Od Profit after tax
CHOICES A. Only Statement I is correctB. Only Statement II is falseC. Statements II and III are falseD. Only Statement III is falseE. All statements are correct
12. The validity of MM theorem arises from A. managers maximizing shareholder value B. managers following the correct capital budgeting decisions C. the principle of no-arbitrage in perfect market D. managers optimizing firms' capital structures
I) WTat 13 meun by WOrkIng cupluun 2) Explain the risk-profitability tradeoff in working capital management. 3) Identify and explain the common compositions of working capital.
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