Question Question 1.1.Which of the following capital budgeting techniques ignores the time value of money? (Points : 2.5) payback period approach net present value internal rate of return profitability index Question 2.2.

Question Question 1.1.Which of the following capital budgeting techniques ignores the time value of money? (Points : 2.5) payback period approach net present value internal rate of return profitability index Question 2.2.

The ________ is the rate of return that a firm must earn on its investments in order to maintain the market value of its stock. (Points : 2.5) yield to maturity cost of capital internal rate of return modified internal rate of return Question 3.3. The cost of common stock equity is ________. (Points : 2.5) the cost of the guaranteed stated dividend expected by the stockholders the rate at which investors discount the expected dividends of the firm to determine its share value the after-tax cost of the interest obligations the historical cost of floating the stock issue Question 4.4. A firm has an average age of inventory of 90 days, an average collection period of 40 days, and an average payment period of 30 days. The firm’s operating cycle is ________ days. (Points : 2.5) 110 130 120 70 Question 5.5. Which of the following is true of current assets? (Points : 2.5) The time of conversion of current assets to more liquid form is relatively unpredictable. They are used to fund long-term operations and pay long-term expenses. They are more profitable because they add more value to the product than that provided by fixed assets. They are sources of short-term financing for a firm Question 6.6.At a firm’s quarterly dividend meeting held April 9, the directors declared a $0.50 per share cash dividend for the holders of record on Monday, May 1. The firm’s stock will sell ex dividends on ________.(Points : 2.5) April 28 May 5 April 29 April 27 Question 7.7. Generally, the order of cost, from the least expensive to the most expensive, for long-term capital of a corporation is ________. (Points : 2.5) new common stock, retained earnings, preferred stock, long-term debt common stock, preferred stock, long-term debt, short-term debt preferred stock, new common stocks, common stock, retained earnings long-term debt, preferred stock, retained earnings, new common stock Question 8.8. Cash flows that could be realized from the best alternative use of an owned asset are called ________. (Points : 2.5) incremental costs lost resale opportunities opportunity costs sunk costs Question 9.9. The clientele effect refers to ________. (Points : 2.5) the relevance of dividend policy on a firm’s share value a firm’s ability to attract stockholders whose dividend preferences are similar to the firm’s dividend policy the informational content of dividends that helps in predicting the future earnings and growth of a firm the “bird-in-the-hand” argument Question 10.10.An increase in fixed operating costs will result in ________.(Points : 2.5) a decrease in the degree of operating leverage an increase in the degree of operating leverage a decrease in the degree of financial leverage an increase in the degree of financial leverage Question 11.11. A firm has an average age of inventory of 60 days, an average collection period of 45 days, and an average payment period of 30 days. The firm’s cash conversion cycle is ________ days. (Points : 2.5) 15 45 75 135 Question 12.12. What is the NPV for a project whose cost of capital is 15 percent and initial after-tax cost is $5,000,000 and is expected to provide after-tax operating cash inflows of $1,800,000 in year 1, $1,900,000 in year 2, $1,700,000 in year 3, and $1,300,000 in year 4? (Points : 2.5) $1,700,000 $371,764 -$137,053 -$4,862,947 Question 13.13. Breakeven analysis is used by a firm ________. (Points : 2.5) to determine the level of operations necessary to cover all fixed operating costs to determine the least cost of producing goods and services to evaluate the profitability associated with vari

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