7) Which types of projects are likely to be incorrectly accepted when the WACC is used as the discount rate for all projects?

Question 7 options:

1)

Low risk projects

2)

Moderate risk projects

9) Over the last 100 years, which of the following has provided the highest average return?

Question 9 options:

1)

Large stocks

2)

Small stocks

3)

Long term corporate bonds

4)

US Treasury bills

3)

High risk projects

4)

All projects

11)

Which of the following is NOT a factor that the expected return on a risky investment depends on?

Question 11 options:

1)

The risk-free rate

2)

Market risk premium

3)

Systematic risk

4)

Call provisions of corporate debt

12) Which of the following represents net working capital?

Question 12 options:

1)

Cash minus other current assets plus current liabilities

2)

Cash plus other current assets plus current liabilities

3)

Cash plus other current assets minus current liabilities

4)

None of the listed options