fin320r1week4selfassesmentquestions

fin320r1week4selfassesmentquestions - b. Equity cost c....

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FIN/320 Self-Assessment Questions Week Four : Capital Budgeting Concepts 1. The payback period is the amount of time necessary for an investment to generate enough cash flows to recover its original cost. True False 2. The net present value rule states that an investment should be accepted if the NPV is negative. True False 3. What is the IRR of an investment of $200.00 that pays $210.00 in one year? a. 2% b. 5% c. 10% d. 15% e. 20% 4. A(n) __________ is a cost that has already been paid and should not be considered in an investment decision. a. Opportunity cost
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Unformatted text preview: b. Equity cost c. Dividend d. Sunk cost e. Primary cost 5. In an efficient capital market _____________________. a. Security prices are set by the government b. All securities cost the same c. Security prices reflect available information d. All securities are valued using the SEC model e. All of the above 6. If you have a portfolio valued at $500.00 and one asset within in that portfolio is valued at $100.00, what is the portfolio weight of that asset? a. .10 b. .20 c. .25 d. .50 e. 1.0...
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This note was uploaded on 12/29/2009 for the course FIN 320 ASDFI taught by Professor Asdf during the Spring '09 term at University of Phoenix.

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