Project whose cash flows accrue relatively rapidly

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1. Which of the following statements is true of a project whose cash flows accrue relatively rapidly?? a. ?The project will have multiple internal rates of return due to rapidly accruing cash flows. b. ?The payback period is longer than the years expected to recover the original investment. c. ?The net present value of the project is always negative if cash flows accrue rapidly. d. ?The required rate of return is revised throughout the duration of the project. e. ?The net present value is not very sensitive to changes in the discount rate.

2. Which of the following statements about beta is correct?? a. ?Firms with greater systematic risk volatilities than the market have betas that are less than 1.0, and firms with smaller systematic risk volatilities than the market have betas that are greater than 1.0. b. ?Firms with greater unsystematic risk volatilities than the market have betas that are greater than 1.0, and firms with smaller unsystematic risk volatilities than the market have betas that are less than 1.0. c. ?Firms with greater systematic risk volatilities than the market have betas that are less than zero, and firms with smaller systematic risk volatilities than the market have betas that are greater than zero. d. ?Firms with greater systematic risk volatilities than the market have betas that are greater than 1.0, and firms with smaller systematic risk volatilities than the market have betas that are less than 1.0. e. ?Firms with greater unsystematic risk volatilities than the market have betas that are less than 1.0, and firms with smaller unsystematic risk volatilities than the market have betas that are greater than 1.0.

Reference no: EM131901583

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