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Question 1 When the present value of the cash i...

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Question 1 When the present value of the cash inflows exceeds the initial cost of a project, then the project should be: Question 1 options: A) accepted because the internal rate of return is positive. B) accepted because the profitability index is greater than 1. C) accepted because the profitability index is negative. D) rejected because the internal rate of return is negative. E) rejected because the net present value is negative. Question 2 What is the main problem in using a balance sheet to provide an accurate assessment of the value of a company's equity? Question 2 options: A) Valuable assets such as the company's reputation, the quality of its work force, and the strength of its management are not captured on the balance sheet. B) The balance sheet does not accurately represent the book value of assets held by the company. C) The equity shown on the balance sheet does not reflect the market capitalization of the company. D) Knowing at a single point in time what assets a firm possesses and the liabilities a firm owes does not give any indication of what those assets can produce in the future. Question 3 WorldCom classified $3.85 billion in operating expenses as long-term investments. How would this make WorldCom's financial statements more attractive to investors? Question 3 options: A) by decreasing depreciation B) by reducing capital expenditures C) by raising its reported earnings D) by boosting its cash flows

 

Paper#2609 | Written in 18-Jul-2015

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