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Author Question: Which of the following is a reason that makes NPV a better approach to capital budgeting on a purely ... (Read 47 times)

joesmith1212

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on: Jul 10, 2018
Which of the following is a reason that makes NPV a better approach to capital budgeting on a purely theoretical basis?
 
  A) It measures the benefits relative to the relative amount invested.
  B) The reinvestment rate assumed by this method is reasonable.
  C) Financial decision makers are inclined to higher rates of return.
  D) Interest rates are expressed as annual rates of return.

Question 2

A corporation raises 500,000 in long-term debt to acquire additional plant capacity. This is considered as ________.
 
  A) an investment cash flow
  B) a financing cash flow
  C) a financing cash flow and investment cash flow, respectively
  D) a financing cash flow and operating cash flow, respectively


xMRAZ

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Reply #1 on: Jul 10, 2018
Answer to Question 1

B

Answer to Question 2

C


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