BFIN 300 Questions With Solutions
_____ refers to the firm's interest payments less any net new borrowing Cash flow to
creditors
Payback is frequently used to analyze independent projects because It is easy and quick to
calculate
A business created as a distinct legal entity composed of one ...
_____ refers to the firm's interest payments less any net new borrowing Cash flow to
creditors
Payback is frequently used to analyze independent projects because It is easy and quick to
calculate
A business created as a distinct legal entity composed of one or more individuals or entities is a
Corporation
The ________________ breaks down return on equity into three component parts Du
Point Identity
Risk that affects at most a small number of assets is called Unsystematic Risk
The cash flows of a project should Include all incremental costs, including opportunity
costs
, BFIN 300 Questions With Solutions
The rate at which a stock's price is expected to appreciate (or depreciate) is called the _____
yield Capital Gains
The internal rate of return for a project will increase if The initial cost of the project can
be reduced
A bond has a market price that exceeds its face value. Therefore, the Yield to maturity is
less than the coupon rate
It is easier to evaluate a firm using its financial statements when the firm Uses the same
accounting procedures as other firms in its industry
The cash flow tax savings generated as a result of a firm's tax-deductible depreciation expense is
called the Depreciation tax shield
An increase in total assets Must be offset by an equal increase in liabilities and
shareholders' equity
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