midterm practice - Time Remaining: 1. (TCO G) Which of the...

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1. (TCO G) Which of the following statements is correct? (Points: 10) One way to increase EVA is to achieve the same level of operating income but with more investor- supplied capital. If a firm reports positive net income, its EVA must also be positive One drawback of EVA as a performance measure is that it mistakenly assumes that equity capital is free. One way to increase EVA is to generate the same level of operating income but with less investor- supplied capital. Actions that increase reported net income will always increase net cash flow. 2. (TCO D) Assume that the current coporate bond yield curve is upward sloping. Under this condition, then we could be sure that. .. (Points: 10) Inflation is expected to decline in the future. The economy is not in a recession Long-term bonds are a better buy than short-term bonds Maturity risk premiums could help to explain the yield curve's upward slope Long-term interest rates are more volatile than short-term rates. 3. (TCO B) What's the future value of $1,500 after 5 years if the appropriate interest rate is 12%, compounded monthly? (Points: 10) $1,922.11 $2,725.05 $2,600.11 $2,230.66 $2,342.19 4. (TCO B) What's the present value of $1,525 discounted back 5 years if the appropriate interest rate is 12%, compounded monthly? (Points: 10)
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midterm practice - Time Remaining: 1. (TCO G) Which of the...

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