The capital investment is one that Select one: a. applies only to investment in fixed assets b. is only undertaken by large corporations c. has the prospect of long-term benefits d. None of the option e. has the prospect of short-term benefits

Q: A project is accepted if, Net present value of the project is positive. IRR is lower than cost of…

A: Net Present Value method is used to ascertain whether the proposal should be selected or rejected…

Q: From a financial perspective, how are projects chosen when capital rationing exists? Do you think…

A: In this question, we are required to determine how projects are chosen based on capital rationing…

Q: Value One category of capital investment evaluation methods does not use present value. The primary…

A: Cash Pay Back Method and Accounting Rate of Return are two Traditional methods of capital budgeting.…

Q: Where capital availability is unlimited and the projects are not mutually exclusive, for the same…

A: Capital Budgeting techniques help to make investment decisions in long term.

Q: Which of the following is not a determinant of investment? a) The efficiency of capital equipment…

A: To increase capital assets, business do investments in property, fixed assets, financial market,…

Q: Why should a firm's investments always exceed its cost of capital?

A: The main aim behind any investment is to generate returns for the company. These projects help the…

Q: A company should accept for investment all positive NPV investment alternatives when which of the…

A:

Q: If a company has over capitalization, rate of earning is: Select one: a. equal with the rate of…

A: In case of over capitalization, a company issues more debt and equity as compared to the worth of…

Q: Ignoring differences in the useful lives of investments when evaluating ca

A: Capital expenditures are distinct from operating expenditures, which are day-to-day spending…

Q: How is commercial real estate different from other asset types? a) lots of capital is required b)…

A: Commercial real estate is very important in the growth of any country and commercial real estate are…

Q: Profitability Index is used when:   A. projects are not divisible and the company is in capital…

A: Profitability index is quite extensively used in selecting of projects.

Q: the Capital Asset Pricing M

A: Explanation : In simple words, Capital asset pricing model for valuing the cost of capital contains…

Q: Which one of the following could be considered as an advantage of using the payback method of…

A: Solution: Payback period represents that period where the initial cost of the investment gets…

Q: Based on the assumption efficient capital market is characterized by rationality and risk aversion,…

A: When a business attempts to maximize the wealth of their firm, they are really attempting to build…

Q: Methods that ignore the time value of money in capital investment appraisal include which of the…

A: Net present value – Net present value is the difference between present value of cash inflows of…

Q: Consider the following statement: In a capital rationing problem withdivisible investments, if all…

A: Capital rationing is a technique used in capital budgeting to maximize profitability by restricting…

Q: A firm is considering the purchase of assets that will increase its fixed operating costs. The firm…

A: Degree of combined leverage = Contribution / Earnings before tax

Q: According to Capital Asset Pricing theory (CAPM), in a competitive marketplace: Group of answer…

A: Capital Asset Pricing Model(CAPM) is an investment tool used to determine the fair valuation of…

Q: None

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

Q: Why do we use the overall cost of capital for investment decisions even when only one source of…

A: The question is based on the concept of Financial planning.

Q: What are the principal objections to the use of the average rate of return method in evaluating…

A: Average rate of return: Under this method, the average net income is used in evaluating the capital…

Q: Which of the following are assumptions of the Capital Asset Pricing Model (CAPM)? Check all that…

A: This model is developed so that return rate required on investment based of the expected risk and…

Q: Which combination of investment policy and financing policy related to working capital provides the…

A: A relaxed current asset investment policy is one under which relatively large amounts of current…

Q: If Corporation A operates at full capacity and Corporate B operates at less than full capacity which…

A: Companies when planning to expand the business or to increase the sales levels, the need of…

Q: Residual income is the excess of operating income over the cost of capitalassociated with the…

A: Residual income is the excess of operating income over the cost of capital associated with the…

Q: Which of the following statements is true about perfect capital markets?   Group of answer choices…

A: A perfect capital market is a market that has some idyllic properties. In a perfect capital market…

Q: The cost of capital is sometimes referred to as the discount rate or the opportunity cost. What it…

A: Cost of capital is very important in capital budgeting decision making.