Reported earnings rather than cash flows

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Reference no: EM132018079

1. Net present value may be interpreted as the amount by which the market value of the firm will change if the project is accepted.

True / False

2. In most capital budgeting decisions the emphasis should be on reported earnings rather than cash flows.

True / False

3. You own a portfolio equally invested in a risk-free asset and two stocks. One of the stocks has a beta of 0.5, and the total portfolio is twice as risky as the market. What is the beta coefficient of the other stock in your portfolio?

1.5

4.1

5.5

6.7

Reference no: EM132018079

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