Introduction to Finance - Milestone 4 Questions & 100% correct AnswersLatest Test | Graded A+ | Passed
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Course
Ntroduction to Finance
Institution
Ntroduction To Finance
What is one advantage of NPV as a capital budget method?
It is equally accurate whether cash flows are known or estimated.
It is flexible, in the sense that the discount rate can be adjusted to account for factors like risk.
Cash flows and the discount rate are easy to accurately determine.
It ...
E x c e l l e n c e i s k e y | 2 0 2 0 2 5 ~ P a g e |1
Introduction to Finance - Milestone 4
Questions & 100% correct Answers-
Latest Test | Graded A+ | Passed
What is one advantage of NPV as a capital budget method?
It is equally accurate whether cash flows are known or estimated.
It is flexible, in the sense that the discount rate can be adjusted to account for factors like risk.
Cash flows and the discount rate are easy to accurately determine.
It accounts fully for opportunity costs.
Ξ -:- It is flexible, in the sense that the discount rate can be adjusted to account for
factors like risk.
Which of the following describes derivatives, rather than debt securities or equity securities?
They are the least risky of the three.
They are considered a liquid investment.
They are a fixed-term security.
They are often used to offset external risks like changes in commodity pricing.
Ξ -:- They are often used to offset external risks like changes in commodity pricing.
What can a business that has too little working capital do to increase it?
, E x c e l l e n c e i s k e y | 2 0 2 0 2 5 ~ P a g e |2
Seed money is a type of financing appropriate for a company in what stage of development?
Decline
Maturity
Growth
Introduction
Ξ -:- Introduction
An electronics company is preparing a capital budget and considering four long-term investments.
The payback period of each project is as follows:
Project A: 4 years
Project B: 5.2 years
Project C: 2.4 years
Project D: 3 years
In theory, which two projects should the company pursue?
Projects A and B
Projects B and D
Projects A and C
Projects C and D
Ξ -:- Projects C and D
When performing capital budgeting and considering replacement projects, one factor that must be
considered is the potential __________ of equipment that is no longer needed.
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