BUS 401 QUES. 3

 1.	Question :	Net present value (NPV) is best defined as:

 	

Question 2.	Question :	The payback period has several weaknesses. From the list below, identify the item that is NOT necessarily a weakness of the payback period method.

 	


Question 3.	Question :	The key to successful capital budgeting is to:

 	


Question 4.	Question :	The typical corporate investment requires a large cash outlay followed by several years of cash inflows. To make these cash flows comparable, we do which of the following?

 	


Question 5.	Question :	A benefit of debt financing is that:

 	

Question 6.	Question :	To determine incremental cash flows, we apply the with-and-without principle, which compares:

 	


Question 7.	Question :	You receive an annual raise of $4,000. If you tax rate is 22%, how much will this increase your after-tax earnings?

 	


Question 8.	Question :	In perfect capital markets, the capital structure decision is:

 	


Question 9.	Question :	Which of the following is a problem associated with bankruptcy?

 	


Question 10.	Question :	If depreciation expense is a noncash charge, why do we consider it when determining cash flows?

 	

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