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- The Role and Objective of Financial ManagementThe Domestic and International Financial MarketplaceEvaluation of Financial PerformanceFinancial Planning and ForecastingThe Time Value of MoneyFixed Income Securities: Characteristics and ValuationCommon Stock: Characteristics, Valuation, and IssuanceAnalysis of Risk and ReturnCapital Budgeting and Cash Flow AnalysisCapital Budgeting: Decision Criteria and Real Option ConsiderationsCapital Budgeting and RiskThe Cost of CapitalCapital Structure ConceptsCapital Structure Management in PracticeDividend PolicyWorking Capital Policy and Short-term FinancingThe Management of Cash and Marketable SecuritiesManagement of Accounts Receivable and InventoriesLease and Intermediate-term FinancingFinancing With DerivativesRisk ManagementInternational Financial ManagementCorporate RestructuringAppendix: Continuous Compounding and DiscountingAppendix: Mutually Exclusive Investments Having Unequal LivesAppendix: Breakeven AnalysisAppendix: Bond Refunding AnalysisAppendix: Taxes

Question 1

Free

Multiple Choice

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Equivalent annual annuities

Replacement chains

Linear programming

a and b only

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Question 2

Free

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the equivalent annual annuity method is often computationally simpler

the equivalent annual annuity method simplifies the handling of the time discrepancies that frequently arise in the replacement chain method

the equivalent annual annuity method is theoretically superior

a and b only

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Question 3

Free

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unequal lives

unequal net cash flows

unequal net investments

a and b

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Question 4

Free

Multiple Choice

-Using a replacement chain, which project should be chosen? Assume that in 5 years, Project A will still cost $120,000 and produce 5 more years of $37,000 annual net cash flows.

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Project B. NPV of A is negative

Project A. NPV of B is negative

Project B. NPV is $492 higher

Project A. NPV is $6,468 higher

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Question 5

Free

Multiple Choice

-Using the equivalent annual annuity method, which project should be chosen?

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Project B, NPV is approximately $823 higher

Project A, NPVB is negative

Project B, NPV is $10,473 approximately higher

Project B, NPV is $90.56 approximately higher

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Question 6

Multiple Choice

Assume in two years Project S will still cost $70,000 and produce the same two years of cash flows.

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NPVs = $8,860: NPVT = $109,240

NPVs = $14,690: NPVT = $109,240

NPVs = $40,020: NPVT = $109,240

None of the above

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Question 7

Multiple Choice

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Project A, NPV is $17,941 higher

Project B, NPV is $11,125 higher

Project A, NPV is $28,383 higher

Project B, NPV is $21,567 higher

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Question 8

Multiple Choice

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Project A

Project B

Indifferent between the two projects

Neither, because both projects have a negative NPV

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Question 9

Multiple Choice

If the cost of capital for TM is 13%, which machine should they purchase?

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Beta: has the highest total net cash flows

Beta: it has the highest NPV

Axa: it has the highest NPV using infinite replacement

Beta: it has the highest NPV using infinite replacement

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Question 10

Multiple Choice

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A, $862

A, $1,800

B, $2,475

B, $902

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Question 11

Multiple Choice

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B, $564

B, $2,388

A, $1,646

A, $280

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Question 12

Multiple Choice

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B, $4,920

A, $7,111

B, $10,650

A, $7,800

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Question 13

Multiple Choice

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A

B

Both A and B

neither A or B

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Question 14

Multiple Choice

Year

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$5,527.89

$4,355.25

$7,768.67

$2,259.62

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Question 15

Multiple Choice

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$2,024

$5,033

$1,257

$8,358

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Question 16

Multiple Choice

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$5,304

$6,271

$2,058

$4,157

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Question 17

Multiple Choice

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the Gordon Model

the payback period

the net present value method

equivalent annual annuity approach

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Question 18

Multiple Choice

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the net present value method

linear programming

the replacement chain method

the internal rate of return

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Question 19

Essay

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Question 20

Essay

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