Would you recognize the interest and principal payments

Reference no: EM13282948

1. A reduction in accounts payable uses cash, reducing the firm's net balance

2. At each point in time all securities of the same risk are priced to offer the same expected rate of return

3. Suppose you finance a project partly with debt. You should neither subtract the debt proceeds from the required investment, nor would you recognize the interest and principal payments on the debt as cash outflows

4. If a project has zero NPV when the expected cash flows are discounted at the weighted-average cost of capital, then the project's cash flows are just sufficient to give debt holders and shareholders the return they require.

Reference no: EM13282948

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