Reference no: EM132809404

Problem 1) Which of the following is true of an investment?

A. The higher the cost of capital, the lower the net present value.

B. The lower the cost of capital, the higher the internal rate of return.

C. The longer the project's life, the shorter its payback period.

D. The higher the project's net present value, the shorter its life.

Problem 2) Which of the following is not a key determinant of financial leverage?

a. level of debt

b. cost of debt

c. technology

d. capital structure

Problem 3) The use of financial leverage by the firm has a potential impact on which of the following?

A. The risk associated with the firm

B. The return experienced by the shareholder

C. The variability of net income

D. The degree of operating leverage

E. The degree of financial leverage