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future, and if your business has a cost of capital of 14 percent, which
one should you choose?
Machine A
Machine B
Neither machine A nor B
Both machines A and B
When firms use multiple sources of capital, they need to calculate
the appropriate discount rate for valuing their firm’s cash flows
as__________.
a simple average of the capital components costs
a weighted average of the capital components costs
a sum of the capital components costs
they apply to each asset as they are purchased with their respective
forms of debt or equity
Which of these is used as a measure of the total amount of available
cash flow from a project?
Operating cash flow
Investment in operating capital
Free cash flow
Sunk cash flow
Which of these does NOT perform vital functions to securities
markets of all sorts by channeling funds from those with surplus
funds to those with shortages of funds?
Secondary markets
Mutual funds
Insurance companies
Commercial banks
Will’s Wheels, Inc. reported a debt-to-equity ratio of 0.65 times at
the end of 2013. If the firm’s total debt at year-end was $5 million,
how much equity does Will’s Wheels have?
$7.69 million
$5 million
$0.65 million
$3.25 million