Considered capital budgeting decision

Assignment Help Financial Management

Reference no: EM13890481

1. Which of the following would NOT be considered a capital budgeting decision?

A) Walmart purchases inventory for resale to customers.

B) Morgan Stanley installs elevators to comply with the Americans With Disabilities Act.

C) Caterpillar replaces manufacturing equipment with more efficient new equipment.

D) Pfizer develops a new therapy and brings it to market.

2. The equivalent annual cost method is most appropriate in which of the following situations?

In each case, assume that several mutually exclusive options are available.

A) Introducing a new product line

B) Adding another store to a chain of retail stores

C) Installation of federally mandated safety equipment

D) Equipment to reduce production costs

3. If a project has a profitability index greater than 1,

A) the npv will also be positive.

B) the irr will be higher than the required rate of return.

C) the present value of future cash flows will exceed the amount invested in the project.

D) all of the above.

Reference no: EM13890481

Questions Cloud

What is the amount of the loan : C Corp borrowed money from XYZ Bank at 11.53% interest for nine years. The loan calls for annual payments of $9,846.38 beginning today. What is the amount of the loan?

Explain why the ratios are different between two industries : Given the following industry average ratios for managed care organizations and nursing homes, explain why the ratios are different between the two industries.

Laws may justifiably be used to restrict the freedom ofother : The idea that laws may justifiably be used to restrict the freedom of others for their own good is called

Typical consequences of good capital budgeting decisions : The issuance of bonds to raise capital for a corporation: Common stockholders are essentially: Which of the following are typical consequences of good capital budgeting decisions?

Considered capital budgeting decision : Which of the following would NOT be considered a capital budgeting decision? The equivalent annual cost method is most appropriate in which of the following situations? If a project has a profitability index greater than 1,

Free cash flow for the most recent year : Manzell Corp.'s free cash flow (FCF) for the most recent year is $470 (million). FCF is expected to grow by 18% next year, by 11% the year after that, and by 3% per year thereafter. Manzell's WACC is 10%. The estimated enterprise value is $__________..

Common stockholders expect greater returns : Common stockholders expect greater returns than bondholders because: An decrease in the ________ will increase the value of preferred stock. Changes in the general economy, such as changes in interest rates or tax laws, represent what type of risk?

Explain how perception affected each partys negotiation goal : Apply general attribution theory to analyze and explain each party's attitudes and conclusions. Hint: Use consensus, consistency, distinctiveness, and the fundamental error - Explain how perception affected each party's negotiation goals.

The issuance of bonds to raise capital for a corporation : The issuance of bonds to raise capital for a corporation: The discount rate used to value a bond is: If the market price of a bond increases, then:

User Account

All Pages