Reference no: EM132809425
Problem 1: Cost of capital is...
A. the amount the company must pay for its plant assets
B. the dividends a company must pay on its equity securities
C. the cost the company must incur to obtain its capital resources
D. the cost the company is charged by investment bankers who handle the issuance of equity or long-term debt securities
Problem 2: A capital investment decision is essentially a decision to
A. exchange current assets for current liabilities
B. exchange current cash outflows for the promise of receiving future cash inflows
C. exchange current cash flow from operating activities for future cash inflows from investing activities
D. exchange current cash inflows for future cash outflows
Problem 3: Which of the following is generally excluded in estimating the weighted average cost of capital?
A. Preferred stock
B. Ordinary equity
C. Long-term debt
D. Short-term debt
Problem 4: The final aspect of the capital budgeting process is the?
A. Capital rationing
B. Net operating cash flow
C. Implementation stage
D. Post audit