Return on investment roi does not have a consistent

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36. Return on investment (ROI) does not have a consistent relationship with NPV. Therefore, it does not measure managerial success in choosing projects . a. that have a positive net present value. b. that create value. c. a & b
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d. none of these a 37. A(n) is a set of procedures for evaluating a capital budgeting decision after the fact. d 38. One form of a(n) is to determine the value of abandonment, versus continued operation, of an entire project. a 39. If capital budgeting decisions were , there would not be much reason to study the process. b 40. Capital rationing limits the firm's . a. capital structure. b. capital expenditures. c. past dividend payout. d. b & c c 41. Managers must also be found for new projects. has a way of reducing such costs. d 42. Because of , great financial management rarely makes a firm extraordinarily profitable. d 43. Beyond innovative ideas, a firm should search for ways to make high-quality use of its .
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a 44. When options exist, the of a project is its DCF-NPV plus the expected value of the option minus the cost of the option. a. NPV b. payback c. IRR d. PI III. Multiple Choice (Problems) d 45. The wholesale price for Captain John’s is $3.00 per loaf. One million loaves will be sold in the next year. What is the contribution margin? [ wholesale price minus the variable cost; thus, we cannot tell .] a 46. The wholesale price for Captain John’s is $1.70 per loaf, and the variable cost of production is $0.80 per loaf. What is the contribution margin? [ loaf.] d 47. The wholesale price for Captain John’s is $1.00 per loaf, and the variable cost of production is $0.50 per loaf. Captain John’s is expecting that expansion will allow them to sell an additional 5.0 million loaves in the next year. What additional revenues will be generated from expansion? [ loaf. The additional 5 million loaves would therefore generate an increase of $0.50 per loaf times 5 million loaves = $2,500,000 in revenue each year.] c
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