Fin301 exam3 3 - FIN 301 exam 3 PDF

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FIN 301 exam 3...

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Which one of the following indicates that a project is expected to create value for its owners? Positive net present value Which one of the following can be defined as a benefit-cost ratio? Profitability index Both Projects A and B are acceptable as independent projects. However, the selection of either one of these projects eliminates the option of selecting the other project. Which one of the following terms best describes the relationship between Project A and Project B? Mutually exclusive The possibility that more than one discount rate can cause the net present value of an investment to equal zero is referred to as: multiple rates of return. The net present value profile illustrates how the net present value of an investment is affected by which one of the following? Discount rate The internal rate of return is the: discount rate that results in a zero net present value for the project. The average net income of a project divided by the project's average book value is referred to as the project's: average accounting return. Net present value involves discounting an investment's: future cash flows.

The net present value of an investment represents the difference between the investment's: cost and its market value. The required return on a stock is equal to which one of the following if the dividend on the stock decreases by a constant percent per year? Dividend yield + Capital gains yield The price of a stock at Year 4 can be expressed as: D5/(R - g). Which one of the following will increase the current value of a stock? Increase in the capital gains yield The stream of customer instructions to buy and sell securities is called the: order flow. Most trades on the NYSE are executed: electronically. An agent who buys and sells securities from inventory is called a: dealer. Newly issued securities are sold to investors in which one of the following markets? Primary...