Finance 101

Chapter 12 The Capital Budgeting Decision True / False Questions 1. Capital budgeting decisions involve a minimum time horizon of five years. True False 2. A good capital budgeting program requires that a number of steps be taken in the decision making process. The first step is the explanation of data. True False 3. Possibly the most overlooked part of the capital budgeting process is the search for new opportunities through innovation and creative thinking. True...

Chapter 10 Valuation and Rates of Return True / False Questions 1. The valuation of a financial asset is based on the concept of determining the present value of future cash flows. True False 2. The prices of financial assets are based on the expected value of future cash flows, discount rate, and past dividends. True False 3. The market determined required rate of return is also called the discount rate. True False 4. The discount rate depends on the marke...

Chapter 09 The Time Value of Money True / False Questions 1. An amount of money to be received in the future is worth less today than the stated amount. True False 2. Discounting refers to the growth process that turns $1 today into a greater value several periods in the future. True False 3. Compounding refers to the growth process that turns $1 today into a greater value several periods in the future. True False 4. The interest factor for the future value...