Finc400 week 5 quiz | Business #038; Finance homework help

FIND A SOLUTION AT Academic Writers Bay

FINC400 week 5 quiz
Week 5 Quiz” for FINC400 I004 Sum 13

Question 1 of 25

4.0 Points

In determining the appropriate discount rate for an individual project, the financial manager will be most influenced by the

[removed] A.expected value.


[removed] B.internal rate of return.


[removed] C.standard deviation.


[removed] D.coefficient of variation.



Question 2 of 25

4.0 Points

Which of the following is a characteristic of beta?

[removed] A.Beta measures only the volatility of returns on an individual bond relative to a bond market index.


[removed] B.A beta of 1.0 is of equal risk with the market.


[removed] C.A beta of greater than 1.0 has less risk than the market.


[removed] D.Two of the above are true.



uestion 3 of 25

4.0 Points

Capital rationing

[removed] a way of preserving the assets of the firm over the long term.


[removed] a less than optimal way to arrive at capital budgeting decisions.


[removed] C.assures stockholder wealth maximization.


[removed] D.assures maximum potential profitability.



Question 4 of 25

4.0 Points

Capital budgeting is only a concern of finance and accounting personnel.

[removed] A. True

[removed] B. False


Question 5 of 25

4.0 Points

Even though one project may have superior cash flows, top management may sometimes choose a project that inflates earnings instead of cash flow.

[removed] A. True

[removed] B. False


Question 6 of 25

4.0 Points

Simulation models allow the planner to:

[removed] A.reduce the standard deviations of projects.


[removed] B.test possible changes in each variable.


[removed] with the uncertainty in forecasting outcome


D.b and c.

Question 7 of 25

4.0 Points

The selection of a mutually exclusive project means that all other projects with a positive net present value may also be selected.

[removed] A. True

[removed] B. False


Question 8 of 25

4.0 Points

The cost of capital is assumed to contain no risk for the firm.

[removed] A. True

[removed] B. False


Question 9 of 25

4.0 Points

If three investment alternatives all have some degree of risk and different expected returns, which of the following measures could best be used to rank the risk levels of the projects?

[removed] A.Coefficient of correlation


[removed] B.Coefficient of variation


[removed] C.Standard deviation of returns


[removed] D.Net present value



Question 10 of 25

4.0 Points

To find the exact internal rate of return for projects with uneven cash flows, we can interpolate between two present value annuity factors from Appendix D.

[removed] A. True

[removed] B. False


Question 11 of 25

4.0 Points

Projects with high positive correlation are sometimes valuable because they allow us to smooth out the overall performance of the firm during a business cycle.

[removed] A. True

[removed] B. False


Question 12 of 25

4.0 Points

Which of the following is a false statement?

[removed] A.Risky investments may produce large losses.


[removed] B.Risky investments may produce large gains.


[removed] C.The coefficient of variation is a risk measure.


[removed] D.Risk-averse investors cannot be induced to invest in risky assets.



uestion 13 of 25

4.0 Points

Regardless of risk, no projects should be accepted unless they earn more than the firm’s weighted average cost of capital.

[removed] A. True

[removed] B. False


Question 14 of 25

4.0 Points

Cash flow can be said to equal

[removed] A.operating income less taxes plus depreciation.


[removed] B.operating income less taxes.


[removed] C.operating income before depreciation and taxes plus depreciation.


[removed] D.operating income after taxes minus depreciation.



Question 15 of 25

4.0 Points

There are several disadvantages to the payback method, among them:

[removed] A.payback ignores the time value of money.


[removed] B.payback emphasizes receiving money back as fast as possible for reinvestment.


[removed] C.payback is Basic to use and to understand.


[removed] D.payback can be used in conjunction with time adjusted methods of evaluation.



uestion 16 of 25

4.0 Points

The Net Present Value Method is a more conservative technique for selecting investment projects than the Internal Rate of Return method because the NPV method

[removed] A.assumes that cash flows are reinvested at the project’s internal rate of return.


[removed] B.concentrates on the liquidity aspects of investment projects.


[removed] C.assumes that cash flows are reinvested at the firm’s weighted average cost of capital.


[removed] D.none of these.



Question 17 of 25

4.0 Points

As the cost of capital increases

[removed] A.fewer projects are accepted.


[removed] B.more projects are accepted.


[removed] C.project selection remains unchanged.


[removed] D.None of these.



Question 18 of 25

4.0 Points

The capital budgeting decisions of a firm will have no effect on the share price of the common stock.

[removed] A. True

[removed] B. False-


Question 19 of 25

4.0 Points

The payback method considers all cash inflows.

[removed] A. True

[removed] B. False


uestion 20 of 25

4.0 Points

Capital budgeting is primarily concerned with

[removed] formation in the economy.


[removed] B.planning future financing needs.


[removed] C.evaluating investment alternatives.


[removed] D.minimizing the cost of capital.



Question 21 of 25

4.0 Points

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

[removed] A. True

[removed] B. False


uestion 22 of 25

4.0 Points

Which of the following statements about the “payback method” is true?

[removed] A.The payback method considers cash flows after the payback has been reached.


[removed] B.The payback method does not consider the time value of money.


[removed] C.The payback method uses discounted cash-flow techniques.


[removed] D.The payback method generally leads to the same decision as other investment selection methods



uestion 23 of 25

4.0 Points

The internal rate of return is the interest rate that equates the cash outflows of an investment with the subsequent inflows.

[removed] A. True

[removed] B. False


Question 24 of 25

4.0 Points

Simulation models allow the analyst to test possible changes in the variables used in the model.

[removed] A. True

[removed] B. False


uestion 25 of 25

4.0 Points

The first step in the capital budgeting process is

[removed] A.collection of data.


[removed] B.idea development.


[removed] C.assign probabilities.


[removed] D.determine cashflow.



Order from Academic Writers Bay
Best Custom Essay Writing Services


Why Choose Us?

  • non-plagiarized Papers
  • 24/7 /365 Service Available
  • Affordable Prices
  • Any Paper, Urgency, and Subject
  • Will complete your papers in 6 hours
  • On-time Delivery
  • Money-back and Privacy guarantees
  • Unlimited Amendments upon request
  • Satisfaction guarantee

How It Works

  • Click on the “Place Your Order” tab at the top menu or “Order Now” icon at the bottom and a new page will appear with an order form to be filled.
  • Fill in your paper’s requirements in the "PAPER DETAILS" section.
  • Fill in your paper’s academic level, deadline, and the required number of pages from the drop-down menus.
  • Click “CREATE ACCOUNT ; SIGN IN” to enter your registration details and get an account with us for record-keeping and then, click on “PROCEED TO CHECKOUT” at the bottom of the page.
  • From there, the payment sections will show, follow the guided payment process and your order will be available for our writing team to work on it.


AcademicWritersBay.comnbsp;is an easy-to-use and reliable service that is ready to assist you with your papers 24/7/ 365days a year. 99% of our customers are happy with their papers. Our team is efficient and will always tackle your essay needs comprehensively assuring you of excellent results. Feel free to ask them anything concerning your essay demands or Order. is a private company that offers academic support and assistance to students at all levels. Our mission is to provide proficient andnbsp;high quality academic servicesnbsp;to our highly esteemed clients. is equipped with competent andnbsp;proficient writersnbsp;to tackle all types of your academic needs, and provide you with excellent results. Most of our writers are holders ofnbsp;master's degreesnbsp;ornbsp;PhDs, which is an surety of excellent results to our clients. We provide assistance to students all over the world.
We provide high quality term papers, research papers, essays, proposals, theses and many others. Atnbsp;, you can be sure ofnbsp;excellent gradesnbsp;in your assignments and final exams.

error: Content is protected !!