Reference no: EM13946835
1. A firm's net income before tax, EBT [NIBT] (on the income statement) is affected by _____. a- taxes; b- interest; c-dividends
2. Larry wants to buy a house priced for $325,000. The FHA requires a 2% downpayment and will make a mortgage loan at 3.5% for 30 years [monthly payments]. About how much will Larry's monthly payments be? a-$1459.40; b-$1443.11; c-$1430.21; d-$884.72
3. Financial markets can deal with ____ and an example would be a(n) _____. a- claim on a real asset; bong... b- money market fund; check register... c- capital market assets; factory
4. Proposed project Q has the following after-tax cash flows:
Year 0 1 2 3 4
-$5,000 $1,000 $1,000 $3,000 $5,000
Using a discount rate of 8.38%, is the proposed project acceptable?
a- No; NPV= - $12843; b- No; NPV= -$45; c- Yes; NPV= $2825; d- Yes; NPV= $13358
5. In evaluating a Capital Budgeting proposed project, you have the expected After Tax Cash Flow, the life of the proposed project and the Weighted Average Cost of Capital (WACC). The most important of these is the ___ because ______.
a- after tax cash flow; the owners will get some cash; b- life of the project, it determines how long the cash will come and be reinvested; c- WACC, earning less than this means owners and lenders will not receive their required return.
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When interest rates fall-bond prices on outstanding issues
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Expenses are fully deductible and all gains are taxable
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Should turnberry buy or lease these vans
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Calculate economic order quantity
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Firms net income before tax-Capital Budgeting project
: A firm's net income before tax, EBT [NIBT] (on the income statement) is affected by _____. Larry wants to buy a house priced for $325,000. The FHA requires a 2% downpayment and will make a mortgage loan at 3.5% for 30 years [monthly payments]. In ev..
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What is the appropriate discount rate for the project
: Choice Golf Equipment has a beta of 1.2 and a cost of equity of 13 percent. The risk-free rate of return is 4 percent. Choice is considering a project with a beta of .8. What is the appropriate discount rate for the project?
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: Royal Troon Inc is planning to lease a computer for $6,500 per annum, payable in advance, for a period of 4 years. The lease will cover maintenance expenses. Royal Troon’s chairman feels that if he buys the same computer he should be able to sell it ..
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What is this years capital gains yield
: Company X has net income of 1,000,000 and a plowback ratio of 40%. There are 50,000 shares of stock outstanding. The company plans to increase dividends by 22% each year for the next 2 years and apply a 2.25% growth rate to dividends each year indefi..
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