Question 1 Original Score: pts Regraded Score: 2/ 2 pts
h (@ This question has been regraded. J
Consider both statements: Statement 1. To create economic value, it's only necessary
that a firm create positive accounting profits. Statement 2. Economic profits are NOT
required to be disclosed on a company's financial statements.
Both Statements are False
Question 2 242
One advantage of the NPV method for capital budgeting rather than the discounted
payback period method is that the NPV method . Choose the best answer
from the options below.
considers all cash flows
,Question 3 o/zers
Which ONE of the following is NOT an issue (disadvantage) with the use of the IRR
method to evaluate investment alternatives? Choose the best answer from the
options below.
BOGUS QUESTION: Al of these options are issues with the use of the IRR method
relative to the NPV method
, Question 4 B
If a firm’s Return on Equity is less than its Discount Rate, then an increase in retention
of earnings will _ firm value since reinvested capital earns _ __ than
the cost of capital.
decrease, less
2/2pts
Question 5
An increase in the firm’s retention ratio will _ the dividend paid to
shareholders and _. __ the firm’s growth rate.
reduce, increase
h (@ This question has been regraded. J
Consider both statements: Statement 1. To create economic value, it's only necessary
that a firm create positive accounting profits. Statement 2. Economic profits are NOT
required to be disclosed on a company's financial statements.
Both Statements are False
Question 2 242
One advantage of the NPV method for capital budgeting rather than the discounted
payback period method is that the NPV method . Choose the best answer
from the options below.
considers all cash flows
,Question 3 o/zers
Which ONE of the following is NOT an issue (disadvantage) with the use of the IRR
method to evaluate investment alternatives? Choose the best answer from the
options below.
BOGUS QUESTION: Al of these options are issues with the use of the IRR method
relative to the NPV method
, Question 4 B
If a firm’s Return on Equity is less than its Discount Rate, then an increase in retention
of earnings will _ firm value since reinvested capital earns _ __ than
the cost of capital.
decrease, less
2/2pts
Question 5
An increase in the firm’s retention ratio will _ the dividend paid to
shareholders and _. __ the firm’s growth rate.
reduce, increase
