35.

If you ignore taxes and costs, a stock repurchase will: I. increase the total assets of a firm. II. decrease the earnings per share. III. reduce the total debt of a firm. IV. reduce the total equity of a firm.

II and IV only

IV only

II, III, and IV only

III only

I, III, and IV only

36. Which of the following is/are the advantage of the discounted payback method over regular payback method of project analysis? I. works well for research and development projects II. liquidity bias III. ease of use IV. arbitrary cutoff point V. the consideration of time value of money

I, II, III, IV and V

III only

III and V only

V only

I, II, III and V only

37. Which of the following is/are a project's cash inflow? Ignore any tax effects.

I. payment of wages II. increase in inventory III. sale of used equipment IV. decrease in accounts payable V. decrease in accounts receivable

I, IV and V only

I, III, IV and V only

I, II and III only

I and II only

III and V only

38. A firm can pay its excess cash back to its shareholders by buying back some of its outstanding shares of common stock from them. We call this process __________________.

stock repeal

stock repurchase

stock split

stock dividend

stock recap