财务管理 CHAPTER 9.docVIP

CHAPTER 9 Net Present Value and Other Investment Criteria II. CONCEPTS CAPITAL BUDGETING DECISIONS a 16. Capital budgeting decisions generally: a. have long-term effects on a firm. b. are of short-duration. c. are easy to revise once implemented. d. focus solely on whether or not a particular asset should be purchased. e. have minimal effects on a firm’s operations. CAPITAL BUDGETING DECISIONS e 17. Which of the following are capital budgeting decisions? I. determining whether to sell bonds or issue stock II. deciding which product markets to enter III. deciding whether or not to purchase a new piece of equipment IV. determining which, if any, new products should be produced a. I only b. IIIonly c. II and IV only d. I, III, and IV only e. II, III, and IV only NET PRESENT VALUE d 18. All else constant, the net present value of a project increases when: a. the discount rate increases. b. each cash inflow is delayed by one year. c. the initial cost of a project increases. d. the rate of return decreases. e. all cash inflows occur during the last year of a project’s life instead of periodically throughout the life of the project. NET PRESENT VALUE a 19. The primary reason that company projects with positive net present values are considered acceptable is that: a. they create value for the owners of the firm. b. the project’s rate of return exceeds the rate of inflation. c. they return the initial cash outlay within three years or less. d. the required cash inflows exceed the actual cash inflows. e. the investment’s cost exceeds the present value of the cash inflows. NET PRESENT VALUE d 20. If a project has a net present value equal to zero, then: I. the present value of the cash inflows exceeds the initial cost of the project. II. the project produces a rate of return that just equals the rate required to accept the project. III. the project is expected to produce only the minimally required cash inflows. IV. any delay in