Question
1. When should short-term debt be included when calculating WACC? a. Never b. Always c. Only for a public, listed company d. Only for a
1. When should short-term debt be included when calculating WACC?
a. Never
b. Always
c. Only for a public, listed company
d. Only for a private company
2.) . Which of the following statements is CORRECT?
a. One defect of the IRR method is that it does not take account of the time value of money.
b. One defect of the IRR method is that it assumes that the cash flows to be received from a project can be reinvested at the IRR itself, and that assumption is often not valid.
c. One defect of the IRR method is that it does not take account of cash flows over a projects full life.
d. One defect of the IRR method is that it does consider the time value of money.
3)25. What is the decision rule for accepting or rejecting proposed projects when using internal rate of return?
a. when the internal rate of return is equal to the IRR then accept the project
b. Whenever the internal rate of return is greater than or equal to the required rate of return, the hurdle rate, the project is accepted.
c. Whenever the internal rate of return is less than the required rate of return, the hurdle rate, the project is accepted.
d. When the internal rate of return is more than this required rate of return, the project is accepted.
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