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The capital budgeting decision that requires a choice between two decisions is a(n) _______ project. Independent Dependent Mutually exclusive Inclusive The actual value that a firm loses when it makes a capital budgeting decision is a(n) ______ cost Fixed Opportunity Sample Unknown The number of years required for an investment to return the monies invested is known as a projects Economic life Usage rate Capital decision Payback period The future benefits received from investing in a project are the projects Net cash flows Net investment Net cost Net return The capital components included in a firms weighted cost of capital are Common stock Debt Retained earnings All of the above Weaknesses in using solely the payback method as a measure of a projects risk include Not accounting for the time value of money There is no objective criterion for deciding what is an acceptable payback period Cash flows that occur after the payback period have no impact on the decision All of the above The ____________ of a project is a relative measure of its profitability and provides some information about project risk Payback period Net present value Internal rate of return Profitability index The Roadway Bar is considering building a new dance floor. A marketing survey was done last year costing $10,000, that determined the new dance floor would be a good investment. The new dance floor will cost $100,000, with an additional net working capital requirement of $15,500. the net investment for this new dance floor is $100,000 $125,500 $110,000 $115,500

The capital budgeting decision that requires a choice between two decisions is a(n) _______ project. Independent Dependent Mutually exclusive Inclusive The actual value that a firm loses when it makes a capital budgeting decision is a(n) ______ cost Fixed Opportunity Sample Unknown The number of years required for an investment to return the monies invested is known as a projects Economic life Usage rate Capital decision Payback period The future benefits received from investing in a project are the projects Net cash flows Net investment Net cost Net return The capital components included in a firms weighted cost of capital are Common stock Debt Retained earnings All of the above Weaknesses in using solely the payback method as a measure of a projects risk include Not accounting for the time value of money There is no objective criterion for deciding what is an acceptable payback period Cash flows that occur after the payback period have no impact on the decision All of the above The ____________ of a project is a relative measure of its profitability and provides some information about project risk Payback period Net present value Internal rate of return Profitability index The Roadway Bar is considering building a new dance floor. A marketing survey was done last year costing $10,000, that determined the new dance floor would be a good investment. The new dance floor will cost $100,000, with an additional net working capital requirement of $15,500. the net investment for this new dance floor is $100,000 $125,500 $110,000 $115,500

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter11: Capital Budgeting And Risk
Section: Chapter Questions
Problem 4QTD
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  • The capital budgeting decision that requires a choice between two decisions is a(n) _______ project.
    1. Independent
    2. Dependent
    3. Mutually exclusive
    4. Inclusive
  • The actual value that a firm loses when it makes a capital budgeting decision is a(n) ______ cost
    1. Fixed
    2. Opportunity
    3. Sample
    4. Unknown
  • The number of years required for an investment to return the monies invested is known as a projects
    1. Economic life
    2. Usage rate
    3. Capital decision
    4. Payback period
  • The future benefits received from investing in a project are the projects
    1. Net cash flows
    2. Net investment
    3. Net cost
    4. Net return
  • The capital components included in a firms weighted cost of capital are
    1. Common stock
    2. Debt
    3. Retained earnings
    4. All of the above
  • Weaknesses in using solely the payback method as a measure of a projects risk include
    1. Not accounting for the time value of money
    2. There is no objective criterion for deciding what is an acceptable payback period
    3. Cash flows that occur after the payback period have no impact on the decision
    4. All of the above
  • The ____________ of a project is a relative measure of its profitability and provides some information about project risk
    1. Payback period
    2. Net present value
    3. Internal rate of return
    4. Profitability index
  • The Roadway Bar is considering building a new dance floor. A marketing survey was done last year costing $10,000, that determined the new dance floor would be a good investment. The new dance floor will cost $100,000, with an additional net working capital requirement of $15,500. the net investment for this new dance floor is
    1. $100,000
    2. $125,500
    3. $110,000
    4. $115,500

 

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