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Question
If a capital budgeting project has a negative net present value (NPV),
a. its internal rate of return (IRR) is also negative.
b. its discounted payback period (DPB) is greater than the project's economic life.
c. the firm should invest in the project as long as the initial investment outlay is low.
d. its traditional payback period (PB) is greater than the firm's expected payback period.
e. its internal rate of return (IRR) is greater than the discount rate that would be used to compute the project's NPV.
Answer
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Related questions
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A firm plans to make investments of $5,000 for the next 10 years, paying the amount at the end of each year. This form of cash flow pattern represents a(n) _____.
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Q:
When the payment for an annuity is made at the end of each period, such an annuity is referred to as a(n) _____.
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Q:
Which of the following agreements is included in the Basel III Accord (2010)?
a. Agreement to increase banks' capital (owners' equity) requirements in an effort to reduce the risk that mega bank failures will cause future financial crises
b. Agreement to put restrictions on the ability of the U.S. government to use taxpayers' funds to bail out large financial institutions
c. Agreement to create new organizations to help provide consumers clear and accurate information related to credit so that better-informed decisions can be made
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Q:
Which of the following is true about financial institutions in the United States compared to those in other countries?
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b. U.S. financial institutions have been regulated less than their foreign counterparts with regard to expansion (branching) and the services that could be offered.
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Which of the following plans is administered primarily by the trust departments of commercial banks or by life insurance companies?
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Q:
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Q:
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Q:
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Q:
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Q:
When issuing new securities, which of the following decisions is made jointly by a corporation and its investment banker?
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b. Deciding which investment banker to use
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Q:
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Q:
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Q:
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Q:
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Q:
As compared to U.S banks, foreign banks are less regulated and have fewer restrictions concerning the types of business activities they can pursue. Therefore, foreign banks often engage in numerous aspects of multilayer financial deals.
a. True
b. False
Q:
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a. True
b. False
Q:
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a. True
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Q:
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a. True
b. False
Q:
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a. True
b. False
Q:
Dual listing of a stock leads to a decrease in the marketability of the stock.
a. True
b. False
Q:
The Securities and Exchange Commission (SEC) cannot exercise control over stock trades by corporate insiders.
a. True
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Q:
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b. Wall Street Transparency and Accountability Act
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Q:
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a. True
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Q:
The Securities and Exchange Commission (SEC) was created to develop and approve a set of common international accounting rules.
a. True
b. False
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a. True
b. False
Q:
All firms that are publicly traded in the United States will be required to adopt the _____ in the near future.
a. Generally Accepted Accounting Principles (GAAP)
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c. Governmental Accounting Standards Principles (GASP)
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e. National Advisory Accounting Standards (NAAS)
Q:
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a. The transactions will have no effect on the current ratios.
b. The current ratios of both firms will be increased.
c. The current ratios of both firms will be decreased.
d. Only Emerald Corporation's current ratio will be increased.
e. Only Ruby Company's current ratio will be increased.
Q:
Which of the following statements is true regarding debt ratios?
a. Firms with relatively low debt ratios have higher expected returns when business is good.
b. Firms with relatively low debt ratios are exposed to more risk compared to firms with relatively high debt ratios.
c. Firms with relatively high debt ratios have higher expected returns when business is bad.
d. Firms with relatively high debt ratios have higher expected returns when business is good.
e. Firms with relatively low debt ratios have higher expected returns when business is poor.