Incremental free cash flows of investment decision

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1. Tick the factors that financial manager should include when computing the incremental free cash flows of an investment decision.

a. Sunk costs b. Financing costs c.Project externalities d. Opportunity costs

2. The Arrow Company Ltd issued a debenture 10 years ago with a coupon rate of 6% (annual coupon) that will matures in 5 years. The current market price of the debenture is $98.5 and the par value is $100. What is the yield on Arrow Company debentures?

a. None of the other answers are true.

b. The yield on Arrow Company debentures is 6% per annum.

c. The yield on Arrow Company debentures is 6.36% per annum.

d. The yield on Arrow Company debentures is 6.46% per annum.

Reference no: EM131871348

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