Chap009
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Chap009

Course Number: FINA 461, Spring 2009

College/University: UNL

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Chapter 09 - Net Present Value and Other Investment Criteria Chapter 09 Net Present Value and Other Investment Criteria Multiple Choice Questions 1. A project has an initial cost of $27,400 and a market value of $32,600. What is the difference between these two values called? A. net present value B. internal return C. payback value D. profitability index E. discounted payback 2. Which one of the following...

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Chapter 09 - Net Present Value and Other Investment Criteria Chapter 09 Net Present Value and Other Investment Criteria Multiple Choice Questions 1. A project has an initial cost of $27,400 and a market value of $32,600. What is the difference between these two values called? A. net present value B. internal return C. payback value D. profitability index E. discounted payback 2. Which one of the following methods of project analysis is defined as computing the value of a project based upon the present value of the project's anticipated cash flows? A. constant dividend growth model B. discounted cash flow valuation C. average accounting return D. expected earnings model E. internal rate of return 3. The length of time a firm must wait to recoup the money it has invested in a project is called the: A. internal return period. B. payback period. C. profitability period. D. discounted cash period. E. valuation period. 4. The length of time a firm must wait to recoup, in present value terms, the money it has in invested in a project is referred to as the: A. net present value period. B. internal return period. C. payback period. D. discounted profitability period. E. discounted payback period. 9-1 Chapter 09 - Net Present Value and Other Investment Criteria 5. A project's average net income divided by its average book value is referred to as the project's average: A. net present value. B. internal rate of return. C. accounting return. D. profitability index. E. payback period. 6. The internal rate of return is defined as the: A. maximum rate of return a firm expects to earn on a project. B. rate of return a project will generate if the project in financed solely with internal funds. C. discount rate that equates the net cash inflows of a project to zero. D. discount rate which causes the net present value of a project to equal zero.

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UNL - FINA - 461
Chapter 10 - Making Capital Investment DecisionsChapter 10 Making Capital Investment DecisionsMultiple Choice Questions1. The difference between a firm's future cash flows if it accepts a project and the firm's future cash flows if it does not accept t
UNL - FINA - 461
Chapter 11 - Project Analysis and EvaluationChapter 11 Project Analysis and EvaluationMultiple Choice Questions1. Forecasting risk is defined as the possibility that: A. some proposed projects will be rejected. B. some proposed projects will be tempora
UNL - FINA - 461
Chapter 12 - Some Lessons from Capital Market HistoryChapter 12 Some Lessons from Capital Market HistoryMultiple Choice Questions1. Last year, T-bills returned 2 percent while your investment in large-company stocks earned an average of 5 percent. Whic
UNL - FINA - 461
Chapter 13 - Return, Risk, and the Security Market LineChapter 13 Return, Risk, and the Security Market LineMultiple Choice Questions1. You own a stock that you think will produce a return of 11 percent in a good economy and 3 percent in a poor economy
UNL - FINA - 461
Chapter 14 - Cost of CapitalChapter 14 Cost of CapitalMultiple Choice Questions1. A group of individuals got together and purchased all of the outstanding shares of common stock of DL Smith, Inc. What is the return that these individuals require on thi
UNL - FINA - 461
Chapter 15 - Raising CapitalChapter 15 Raising CapitalMultiple Choice Questions1. Jones & Co. is funded by a group of individual investors for the sole purpose of providing funding for individuals who are trying to convert their new ideas into viable p
UNL - FINA - 461
Chapter 16 - Financial Leverage and Capital Structure PolicyChapter 16 Financial Leverage and Capital Structure PolicyMultiple Choice Questions1. Homemade leverage is: A. the incurrence of debt by a corporation in order to pay dividends to shareholders
UNL - FINA - 461
Chapter 17 - Dividends and Dividend PolicyChapter 17 Dividends and Dividend PolicyMultiple Choice Questions1. Green Roof Motels has more cash on hand than its operations require. Thus, the firm has decided to pay out some of its earnings in the form of
UNL - FINA - 461
Chapter 18 - Short-Term Finance and PlanningChapter 18 Short-Term Finance and PlanningMultiple Choice Questions1. The length of time between the purchase of inventory and the receipt of cash from the sale of that inventory is called the: A. operating c
UNL - FINA - 461
Chapter 19 - Cash and Liquidity ManagementChapter 19 Cash and Liquidity ManagementMultiple Choice Questions1. Yesterday, the president of RB Enterprises received a phone call from DLK, a competitor. DLK is a sole proprietorship. An unexpected family si
UNL - FINA - 461
Chapter 20 - Credit and Inventory ManagementChapter 20 Credit and Inventory ManagementMultiple Choice Questions1. Blackwell Brothers sells men's suits. The store offers a 1 percent discount if payment is received within 10 days. Otherwise, payment is d
UNL - FINA - 461
Chapter 21 - International Corporate FinanceChapter 21 International Corporate FinanceMultiple Choice Questions1. Which one of the following securities is used as a means of investing in a foreign stock that otherwise could not be traded in the United
UNL - FINA - 461
Chapter 22 - Behavioral Finance: Implications for Financial ManagementChapter 22 Behavioral Finance: Implications for Financial ManagementMultiple Choice Questions1. Amy is the chief financial officer of a retail toy store. Recently, she decided that t
UNL - FINA - 461
Chapter 23 - Risk Management: An Introduction to Financial EngineeringChapter 23 Risk Management: An Introduction to Financial EngineeringMultiple Choice Questions1. Farmer Jones raises several hundred acres of corn and would suffer a significant loss
UNL - FINA - 461
Chapter 24 - Options and Corporate FinanceChapter 24 Options and Corporate FinanceMultiple Choice Questions1. Which one of the following grants its owner the right to buy or to sell an asset at a prespecified price at any time during a stated period? A
UNL - FINA - 461
Chapter 25 - Option ValuationChapter 25 Option ValuationMultiple Choice Questions1. Travis owns a stock that is currently valued at $45.80 a share. He is concerned that the stock price may decline so he just purchased a put option on the stock with an
UNL - FINA - 461
Chapter 26 - Mergers and AcquisitionsChapter 26 Mergers and AcquisitionsMultiple Choice Questions1. Last month, Keyser Design acquired all of the assets and liabilities of Tenor Machine Works. The combined firm is known as Keyser Design. Tenor Machine
UNL - FINA - 461
Chapter 27 - LeasingChapter 27 LeasingMultiple Choice Questions1. Ron leases a car from Uptown Motors and pays $225 a month as a lease payment. Which one of the following terms applies to Ron? A. lessee B. lessor C. guarantor D. trustee E. manager2. T
UNL - ECON - 423
Answers: Homework #1 - ECON 423 - Fall 2008Due: Thursday, September 4All of these questions require essay answers, and there is some leeway in what the student replies. The notes below present some of the things that might have been incorporated into ta
UNL - ECON - 423
Answers - Homework Assignment #2 - ECON 423/823 - Fall, 20081. Using equation (3-10), or Y/Y = gY = /, a. 10% / 2 = 5%. b. 10% / 4 = 2.5%. c. 20% / 2 = 10%. d. 20% / 4 = 5%. Clearly, the growth rate is higher, the higher the rate of saving and the lower
UNL - ECON - 423
Answer Key for Assignment 3 - ECON 423-823 - Fall, 20081. Traditional microeconomic analysis seems to point to price competition as a beneficial characteristic of market economies. Under perfect competition, prices exactly reflect the underlying costs of
UNL - ECON - 423
Answers to Homework Assignment for October 23, 2008 - ECON 423/8231. Figure 9-4 illustrates this typical pattern of the demographic transition. First, the death rate begins to decline, which causes the rate of population growth to rise. Then the birth ra
UNL - ECON - 423
Answer Key - Assignment 6 - ECON 422/822 - Fall 20081. Richard Baldwin incorporated the welfare gains from international trade as described by the general equilibrium model of trade (the PPF/Indifference curve diagram) into the Solow model in a straightf
UNL - ECON - 212
Crude OilTypes of Fuels Created from Crude OilEthane Diesel Fuel Fuel Oils GasolineJet Fuel Kerosene Numerous types of derivativesGreatest Oil Reserves by Country, 2006Rank 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. World total Country Saudi Arabia Canada Ir
UNL - ECON - 212
The market failure of the medical system is being pushed by all the factors Except? high costs * increase in medical staff demand for more care limited supply How many Americans are covered by a private insurance company? 40 million 20 million * 150 milli
UNL - ECON - 212
Every transaction that is made in this economy goes through a repetitive flow of goods and services, resources, and money. This continuous flow is known as the circular flow model in modern economics. In this model resources flow from businesses to househ
UNL - ECON - 212
When examining economies throughout the world, we must understand that economy differs from country to country, tribe to tribe, etc. One thing that we can infer about most economies throughout the world is that they all set goals for themselves. To achiev
UNL - ECON - 212
The term market failure is often used in economics to describe situations where goods and/or services do not serve the common interest of the public. There is a long list of types of market failures, but I will focus on a market failure known as an extern
UNL - ECON - 212
Today, crude oil is one of the most significant parts of everyday life. The world as we know it would not be the same without its existence. Crude oil affects everyone regardless of whether they are directly associated with it or not. The production of cr
UNL - ECON - 212
Today, crude oil is one of the most significant parts of everyday life. The world as we know it would not be the same without its existence. Crude oil affects everyone regardless of whether they are directly associated with it or not. The production of cr
UNL - ECON - 212
The United States is primarily a capitalistic economy, which leads to numerous advantages within the economy. Capitalism, by definition is an economic system in which property resources are privately owned and markets and prices are used to direct and coo
UNL - ECON - 312
Chapter 1PreliminariesThemes of MicroeconomicsMicroeconomics deals with limitsLimited budgets Limited time Limited ability to produceHow do we make the most of limits? How do we allocate scarce resources?2005PearsonEducation,Inc.Chapter12Themes o
UNL - ECON - 312
Chapter 2The Basics of Supply and DemandSupply and DemandThe Supply CurveThe relationship between the quantity of a good that producers are willing and able to sell and the price of the goodQ S = Q S(P)2005PearsonEducation,Inc. Chapter2 2The Supply
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Chapter 3Consumer BehaviorConsumer BehaviorThe theory of consumer behavior can be used to help answer these and many more questions Theory of consumer behaviorThe explanation of how consumers allocate income to the purchase of different goods and serv
UNL - ECON - 312
Chapter 4Individual and Market DemandTopics to be DiscussedIndividual Demand Income and Substitution Effects Market Demand Consumer Surplus Network Externalities Empirical Estimation of DemandChapter4 2Effect of a Price ChangeClothing10Assume: I =
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Chapter 5Uncertainty and Consumer BehaviorIntroductionChoice with certainty is reasonably straightforward How do we make choices when certain variables such as income and prices are uncertain (making choices with risk)?Chapter52Describing Risk To m
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Chapter 6ProductionIntroduction Production decisions of a firm are similar to consumer decisions 1. Production Technology Describe how inputs can be transformed into outputs2. Cost Constraints Firms must consider prices of labor, capital and other i
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Chapter 7The Cost of ProductionMeasuring Cost: Which Costs Matter?Although opportunity costs are hidden and should be taken into account, sunk costs should not Sunk CostExpenditure that has been made and cannot be recovered Should not influence a firm
UNL - ECON - 312
Chapter 8Profit Maximization and Competitive SupplyPerfectly Competitive Markets The model of perfect competition can be used to study a variety of markets Basic assumptions of Perfectly Competitive Markets1. Price taking 2. Product homogeneity 3. Fre
UNL - ECON - 312
Chapter 9The Analysis of Competitive MarketsConsumer and Producer Surplus1. Consumer surplus is the total benefit or value that consumers receive beyond what they pay for the good 1. Producer surplus is the total benefit or revenue that producers recei
UNL - ECON - 312
Chapter 10Market Power: Monopoly and MonopsonyReview of Perfect CompetitionP D Market S P Individual Firm LMC LRACP0P0D = MR = PQ02005PearsonEducation,Inc.QChapter10q0Q2Monopoly Monopoly1. 2. 3. 4. One seller - many buyers One product (no
UNL - ECON - 312
Chapter 11Pricing with Market PowerCapturing Consumer SurplusAll pricing strategies we will examine are means of capturing consumer surplus and transferring it to the producer Profit maximizing point of P* and Q*But some consumers will pay more than P
UNL - ECON - 312
Chapter 12Monopolistic Competition and OligopolyMonopolistic Competition Characteristics1. Many firms 2. Free entry and exit 3. Differentiated product The amount of monopoly power depends on the degree of differentiation Examples of this very common
UNL - ECON - 312
Chapter 13Game Theory and Competitive StrategyGaming and Strategic DecisionsGame is any situation in which players (the participants) make strategic decisionsEx: firms competing with each other by setting prices, group of consumers bidding against eac
UNL - ECON - 312
Chapter 14Markets for Factor InputsCompetitive Factor Markets Characteristics1. Large number of sellers of the factor of production 2. Large number of buyers of the factor of production 3. The buyers and sellers of the factor of production are price t
UNL - FINA - 365
CHAPTER 1The Role of Financial Markets and Institutions1A. Overview of Financial MarketsThree Types of Financial Marketsa. Money vs. Capital Markets b. Primary vs. Secondary Markets c. Organized vs. Over-the-Counter Markets2A. Overview of Financial
UNL - FINA - 365
CHAPTER 2Determination of Interest Rates1A. Loanable Funds TheoryDeterminants of the Demand for Loanable FundsHousehold Demand for Loanable Funds inverse relationship between the interest rate and the quantity of loanable funds demanded. Business Dem
UNL - FINA - 365
CHAPTER 3Structure of Interest Rates1A. Characteristics of Debt Securities that Cause Their Yields to VaryDebt (Default) Risk Rating Agencies Moodys Investor Service Standard and Poors Corporation Accuracy of Credit Ratings Shifts in Credit Risk Pr
UNL - FINA - 365
CHAPTER 4Functions of the Fed1A. Organization of the Fed2A. Organization of the FedFederal Reserve District Banks 12 national districts (We are in district 10) New York is considered most important Member banks must purchase stock Each district has
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CHAPTER 5Monetary Policy12Impact of Monetary PolicyCorrecting a Weak Economy Fed can stimulate the economy by creating a loose-money policy through OMO, how? Correcting High Inflation The Fed can constrain economic activity when it creates a tight-mo
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CHAPTER 6Money Markets1Money Market Securities Treasury Bills Commercial Paper Negotiable Certificates of Deposit Repurchase Agreements Federal Funds Bankers Acceptance2Treasury BillsAre issued by the U.S. Treasury Sold in auction format Have a par
UNL - FINA - 365
Chapter 7Bond Markets. 1How Bond Markets Facilitate the Flow of Funds2Types of Bonds Bearer bonds require the owner to clip couponsattached to the bonds Registered bonds require the issuer to maintainrecords of who owns the bond and automatically
UNL - FINA - 365
Chapter 8Bond Valuation and Risk1Bond Valuation Bond price = the present value of the cash flowsgenerated by the bondPV of bond = C C C + Par + + . (1 + k )1 (1 + k ) 2 (1 + k ) n1 1 (1 + r ) n BV = PMT r + PAR (1 + r ) n 2Example What is the
UNL - FINA - 365
Chapter 9Mortgage Markets. 1Background on Mortgages A mortgage is a form of debt that financesinvestment in property Financial institutions such as savings institutions and mortgage companies originate mortgages The level of mortgage debt has risen o
UNL - FINA - 365
Chapter 10Stock Offerings and Investor Monitoring1How Equity Financing Works2Private Equity Stock of non-publicly traded firms FinancingVenture Capital Private equity funds3Public Equity Ownership and voting rights The owners are permitted to vo
UNL - FINA - 365
Chapter 11Stock Valuation And RiskPrice-Earnings Method (PE) Apply the mean PE ratio of publicly tradedcompetitorsUse expected earnings rather than historicalValuation = Expected per share earningsxMean industry PE ratioExample Your firm is expe
UNL - FINA - 365
Chapter 13Financial Futures Markets1Background on Financial Futures Financial futures contractA standardized agreement to deliver or receive a specified amount of a specified financial instrument at a specified price and date Futures are traded on or
UNL - FINA - 365
Chapter 14Options Markets1Background on Options Call optiongrants the owner the right to purchase a specified financial instrument for a specified price within a specified period of time In the money At the money Out of the money2Buying a call op
Carnegie Mellon - CS - 123
Lecture 1 Introduction to Unix and CIn this lecture Operating System Unix system shell Why learn C Program Development Process Compilation, Linking and Preprocessing ANSI-C The C compiler gcc Jobs and Processes Killing a Process Moving from Java to C Add
Carnegie Mellon - CS - 123
Lecture 02 The Shell and Shell ScriptingIn this lecture The UNIX shell Simple Shell Scripts Shell variables File System commands, IO commands, IO redirection Command Line Arguments Evaluating Expr in Shell Predicates, operators for testing strings, ints
Carnegie Mellon - CS - 123
Lecture 03 Bits, Bytes and Data TypesIn this lecture Computer Languages Assembly Language The compiler Operating system Data and program instructions Bits, Bytes and Data Types ASCII table Data Types Bit Representation of integers Base conversions 1s com