6) Which of the ich of the following would decrease the after tax NPV of a project? - A shift from accelerated to straight line depreciation b) A decrease in the company tax rate c) An increase in the sale proceeds of the old machine d) A decrease in the hurdle rate associated with the project 7) In evaluating a project's cash flows to the firm, which of the following statements are correct? a) the firm's increased tax liability should be included as a cash inflow b) cash flows must always be converted to real values to account for inflation c) the interest costs associated with issuing debt needed for the investment should be included as an outflow d) all of the above 8) Which of the following objectives makes the most sense in an inefficient market where lenders are not fully protected from stockholder expropriation? a) Maximize stockholder wealth b) Maximize stock prices c) Maximize bondholder wealth d) Maximize firm value 9) The marginal investor in a company has a large stockholding and trades a lot. Traditional risk and return models in finance (like the CAPM) work best for companies where the marginal investor is a) the founder/owner of the company b) a small individual investor c) the employee pension fund d) the Government e) an institutional investor 10) Which of the following is a clear and unambiguous example of managers putting their interests over stockholder interests? a) Negotiating for a large compensation contract b) Focusing on increasing the market share of the company c) Paying greenmail to a bidder to avoid being taken over (in a hostile bid) d) Acquiring another company e) Paying a large dividend 11) If you were a bondholder lending to a firm and you were worried that stockholders would take advantage of you, which of the following actions would concern you the most? a) A cut in the dividends paid to stockholders b) A reduction in debt c) Expansion into a risky new business d) A new stock issue e) Accumulation of cash in the company