Question
8. What should you consider when you conduct capital budgeting analysis? a. when the cash flows are made b. the riskiness of the project c.
8. What should you consider when you conduct capital budgeting analysis?
a. when the cash flows are made
b. the riskiness of the project
c. how much the initial investment is for the project
d. all of the above
e. a and b only
9. What does it mean when a capital budgeting project has an NPV of zero?
a. The projects IRR will be less than the required hurdle rate for the project
b. The firms stockholders will earn a positive return, but it will be less than their required return, given the risk of the investment
c. The firms security holders will earn their required rate of return, given the risk of the investment d. The firms stockholders will earn a negative return
e. none of the above
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