BUS 401 Week 3 Quiz
This exam consists of 10 multiple choice and true/false questions.
1. Question : The appropriate cash flows for evaluating a corporate investment decision are:
2. Question : The typical corporate investment requires a large cash outlay followed by several years of cash inflows. To make these cash flows comparable, we do which of the following?
3. Question : If depreciation expense is a noncash charge, why do we consider it when determining cash flows?
4. Question : The internal rate of return is
5. Question : Chapter 7 introduced three methods for evaluating a corporate investment decision. Which of the following is not one of those methods?
6. Question : In perfect capital markets, the capital structure decision is
7. Question : The interplay of the tax advantages of debt and the threat of bankruptcy results in
8. Question : Costs associated with bankruptcy include
9. Question : All else being equal, as debt replaces equity in a profitable company’s capital structure, which of the following occurs?
10 Question : wo important aspects of debt financing are its tax advantages and the threat of bankruptcy. As a company shifts to more and more debt financing