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Need answers to these these questions: Suppose...

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Need answers to these these questions: Suppose a riskless project requires an initial investment of $10 and will generate a one-time cash inflow of $30 two years later. Assuming a risk-free interest rate of 5%, which of the following statements about the project is NOT true? The net present value of the project is positive The IRR is greater than 50 percent. The accounting rate of return on the project is positive. The payback period is less than 2 years. Which is NOT required information when calculating the weighted average cost of capital for a company with debt? its capital structure ratios its cost of debt its current ratio its tax rate For a firm with an optimal capital structure, the weighted average cost of capital (WACC) is: higher than the cost of equity lower than the cost of debt lower than the cost of unlevered equity independent of the capital structure If you borrow capital to start a business and the money is provided interest-free, then your cost of capital is zero. True False Suppose a riskless project requires an initial investment of $10 and will generate a one-time cash inflow of $30 two years later. Assuming a risk-free interest rate of 5%, which of the following statements about the project is NOT true? The net present value of the project is positive The IRR is greater than 50 percent. The accounting rate of return on the project is positive. The payback period is less than 2 years. As EBIT drops, the return on equity (ROE) of a levered firm drops ______ the ROE of an otherwise identical unlevered firm. the same as relatively more than relatively less than more or less than (it cannot be determined) Analysis of a company's financial statements: Below are simplified versions of the balance sheet and income statement for Toys by Tom, Inc. Use this information to answer question 10. What is Toys by Tom, Inc. return on assets (ROA)? 6.9% 0.86 18% 1.2

 

Paper#5500 | Written in 18-Jul-2015

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