Management 133 2nd hourly Spring 2002-3

Management 133 2nd hourly Spring 2002-3 - Management 133...

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Management 133 _____________________________ 2 nd Hourly Examination name Spring, 2002 Form A Section # _________________ Row # _________________ Multiple Choice Questions: 2 points each: _____ 1. If three investment alternatives all have some degree of risk and different expected returns, which of the following measures could best be used to rank the risk levels of the projects? A. coefficient of correlation B. coefficient of variation C. standard deviation of returns D. net present value _____ 2. Capital budgeting is primarily concerned with: A. capital formation in the economy B. planning future financing needs C. evaluating investment alternatives D. minimizing the cost of capital. _____ 3. The after-tax cost of preferred stock to the issuing corporation: A. is the same as the before-tax cost B. is usually lower than the cost of debt C. is dependent on the firm’s tax bracket D. is lower than the before-tax cost. _____ 4. If a company’s stock price (P o ) goes up, and nothing else changes, K e (the required rate of return) should A. go up B. go down C. remain unchanged D. need more information _____ 5. Babe Ruth Jr. has agreed to play for the Cleveland Indians for $3 million per year for the next ten years. What table would you use to calculate the value of this contract in today’s dollars? A. present value of an annuity B. present value of a single amount C. future value of an annuity D. none of the above.
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_____ 6. What is generally the largest source of short-term credit for small firms? A. bank loans B. commercial paper C. installment loans D. trade credit _____ 7. The three primary policy variables to consider when extending credit include all of the following except: A. credit standards B. the level of interest rates C. the terms of trade D. collection policy
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This note was uploaded on 12/21/2011 for the course ECON 101 taught by Professor All during the Spring '11 term at SUNY Albany.

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Management 133 2nd hourly Spring 2002-3 - Management 133...

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