1 Although there is no truly risk free investment, we sometimes use the return on as a risk free rate of return a A stock with a low beta b A stock with a high beta c corporate bonds d short term debt of the US government 2 A start up company might use the payback period, rather than NPV, to evaluate capital budgeting project because a Such a firm might need funds and have difficulty raising additional money b Payback deals with accounting profits and is thus a good indicator of which capital budgeting projects to accept c Payback does a better job than NPV in taking time value of money into consideration d All of the above are reasons for a start up to prefer payback over NPV

Question

1  Although there is no truly risk free investment, we sometimes use the return on     as a risk free rate of return  a  A stock with a low beta b  A stock with a high beta c  corporate bonds d  short term debt of the US government 2  A start up company might use the payback period, rather than NPV, to evaluate capital budgeting project because a  Such a firm might need funds and have difficulty raising additional money b  Payback deals with accounting profits and is thus a good indicator of which capital budgeting projects to accept c  Payback does a better job than NPV in taking time value of money into consideration d  All of the above are reasons for a start up to prefer payback over NPV

Accepted Answer

The Answer is in the image, click to view ...

Question

1. Although there is no truly risk free investment, we sometimes use the return on ___ as a risk free rate of return. a. A

Step by Step Solution

Step: 1

Get Instant Access to Expert-Tailored Solutions

Step: 2

Step: 3

Ace Your Homework with AI

Recommended Textbook for

Modern Project Finance A Casebook

Students also viewed these Finance questions

Question

Question

Question

Question

Question

Question

Question

Question

Question

Question

Question

	a.	A stock with a low beta
	b.	A stock with a high beta
	c.	corporate bonds
	d.	short term debt of the US government

	a.	Such a firm might need funds and have difficulty raising additional money
	b.	Payback deals with accounting profits and is thus a good indicator of which capital budgeting projects to accept
	c.	Payback does a better job than NPV in taking time value of money into consideration
	d.	All of the above are reasons for a start up to prefer payback over NPV