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Liquidity
As new capital budgeting projects arise, we must
estimate__________.
the cost of the stock being sold for the specific project
when such projects will require cash flows
the cost of the loan for the specific project
the float costs for financing the project
What’s the current yield of a 6 percent coupon corporate bond
quoted at a price of 101.70?
6.1 percent
10.2 percent
6.0 percent
5.9 percent
We call the process of earning interest on both the original deposit
and on the earlier interest payments:
computing.
multiplying.
compounding.
discounting.
Which financial statement reports a firm’s assets, liabilities, and
equity at a particular point in time?
Balance sheet
Income statement
Statement of retained earnings
Statement of cash flows
You are trying to pick the least-expensive machine for your
company. You have two choices: machine A, which will cost $50,000
to purchase and which will have OCF of -$3,500 annually
throughout the machine’s expected life of three years; and machine
B, which will cost $75,000 to purchase and which will have OCF of -
$4,900 annually throughout that machine’s four-year life. Both
machines will be worthless at the end of their life. If you intend to
replace whichever type of machine you choose with the same thing
when its life runs out, again and again out into the foreseeable