Time value of money and depends on the cost of capital

Assignment Help Financial Management

Reference no: EM13943167

Which of the following statements is FALSE?

A) The payback rule is useful in cases where the cost of making an incorrect decision might not be large enough to justify the time required for calculating the net present value (NPV).

B) The payback rule is reliable because it considers the time value of money and depends on the cost of capital.

C) For most investment opportunities expenses occur initially and cash is received later.

D) Fifty percent of firms surveyed reported using the payback rule for making decisions.

Reference no: EM13943167

Questions Cloud

Bond yield plus risk premium estimate-cost of comman equity : Barry's common stock is currently selling for $50 a share. Its last dividend was $4.19, and dividends are expected to grow at a constant rate of 5% in the foreseeable future. What is Barry's estimated cost of common equity based on the CAPM approach?..

Describe copyright-public domain and fair use : Briefly describe copyright, public domain, and fair use. Provide a unique example of fair use. Provide an example of when copyright would be violated. Be sure not to duplicate an example that is already posted by one of your classmates times roman..

Compute the speedup for options and decide the option proces : Compute the speedup for options and decide the option Processor Y should take.

Accordance with organizational policy and procedures : Obtain quotations from suppliers/developers of system in accordance with organizational policy and procedures.

Time value of money and depends on the cost of capital : The payback rule is useful in cases where the cost of making an incorrect decision might not be large enough to justify the time required for calculating the net present value (NPV). The payback rule is reliable because it considers the time value of..

Faces and that the boundary layer develops naturally : a super tanker is 360m long and has a width of 70m and draft of 25m. assuming that the drag is mainly due to the skin friction at the bottom and side faces and that the boundary layer develops naturally,

What is Express Shippings WACC : You were hired as a Consultant for Express Shipping, whose targeted capital structure is 35% debt, 10% preferred stock, and 55% common equity. The interest rate on new debt is 6.5%, the yield on preferred stock is 6%, the cost of retained earnings is..

What is firms after-tax cost of debt-cost of preferred stock : Barton Industries can issue perpetual preferred stock at a price of $49 per share. The stock would pay a constant annual dividend of $3.50 per share. If the firm's marginal tax rate is 40%, what is the company's cost of preferred stock? If the firm's..

Discuss consequences of cultural misunderstandings : Write an essay discussing factors that affect interpersonal communication, and outline and discuss consequences of cultural misunderstandings in business environment.

User Account

All Pages