1) | FALSE |
Fixed costs will not increase; only variable cost will. | |
2) | FALSE |
Greater the balance, faster the savings. | |
3) | TRUE |
4) | TRUE |
5) | TRUE |
6) | TRUE |
7) | FALSE |
8) | TRUE |
9) | TRUE |
10) | TRUE |
TRUE AND FALSE I1. True or False (20 points, 2 point each) No. 1. Marginal cost...
TRUE AND FALSE I1. True or False (20 points, 2 point each) No. 1. Marginal cost is based on the principle that an additional unit of production will only entail an increase in the fixed costs and that the variable costs will not be affected. 2. The greater the balance you have in your account, the slower your savings will grow 3. In case of capital rationing, we should accept project with the highest positive NPV 4. Interest Rate measures...
I1. True or False (20 points, 2 point each) No. 1. Marginal cost is based on the principle that an additional unit of production will only entail an increase in the fixed costs and that the variable costs will not be affected. 2. The greater the balance you have in your account, the slower your savings will grow 3. In case of capital rationing, we should accept project with the highest positive NPV 4. Interest Rate measures the coupon payment...
IL. True or False (20 points, 2 point each) No. Answer 1. Marginal cost is based on the principle that an additional unit of production will only entail an increase in the fixed costs and that the variable costs will not be affected. 2. The greater the balance you have in your account, the slower your savings will grow 3. In case of capital rationing, we should accept project with the highest positive NPV 4. Interest Rate measures the coupon...
11. True or False (20 points, 2 point each) 23 4567910 No. 1. Marginal cost is based on the principle that an additional unit of production wiln only entail an increase in the fixed costs and that the variable costs will not be affected 2. The greater the balance you have in your account, the slower your savings will grow 3. In case of capital rationing, we should accept project with the highest positive NPV 4. Interest Rate measures the...
1. True or False (20 points, 2 point each) 12 678 9 10 No. Answer 1. Marginal cost is based on the principle that an aditional unit of production wil only entail an increase in the fixed costs and that the variable costs will not be affected 2. The greater the balance you have in your account, the slower your savings will grow 3. In case of capital rationing, we should accept project with the highest positive NPV. 4. Interest...
True or False for question no 2 to 9 2. The greater the balance you have in your account, the slower your savings will grow. 3. In case of capital rationing, we should accept project with the highest positive NPV. 4. Interest Rate measures the coupon payment as a percentage of the bond's face value. 5. As long as investors agree about a firm's prospects, they will also agree on the value 6. If investors believe a company will have...
Part 2, True/False, 20 points, 1 point each. Please indicate "T" for true and for false in the column to the right 15. A perpetuity must always have a higher value than a common stock because dividends are expected to be paid forever 16. When yield's rise bond and stock values must fall 17. You should always choose the investment with the highest APR (annual percentage rate) even if the number of compounding periods differs. 18. Astock's required return is...
I. True or False (10 points, 1 point each) No. 12 13456 78910 Answer 1. When the market interest rate exceeds the coupon rate, bonds sell for less than face value to provide enough compensation to investors. 2. LVMH's Issuance of a 7-year bond in 2005, raising 600 million euros is a financing decision. 3. A project's payback period is the length of time necessary to generate an NPV of zero. 4. A financial intermediary invests in financial assets rather...
For a typical capital investment project, the bulk of the investment-related cash outflow occurs: During the initiation stage of the project During the operation stage of the project Either during the initiation stage or the operation stage During neither the initiation stage nor the operation stage Evenly during all three stages: initiation, operation, and final disposal The time value of money is explicitly considered in which of the following capital budgeting methods? Payback method Net present value (NPV) method Operating...
1. The time value of money refers to the fact that money has an opportunity cost, i.e., its reinvestment rate. a. True b. False 2. If the payback period is used as the criterion for assigning priorities to investment projects, the highest priority will be assigned to projects with the shortest payback period. a. True b. False 3. The _______________ is the discount rate that makes the present value of the benefits generated by a project equal to the investment....