F.4,7,9,10,11

QUESTION 4 Which of the following is true about dollar returns versus percentage returns? Percentage returns are preferred because dollar returns are liars (they don't accurately reflect the true return earned) Percentage returns are preferred because they are known with more certainty (they have less risk). Dollar returns are preferred because percentage returns are liars (they don't accurately reflect the true return earned) Dollar returns are preferred because they are known with more certainty (they have less risk) QUESTION 7 Your firm is currently renting out some office space to a local nonprofit. If you choose to expand your sales team, you will now need this office space. The rent is currently $4.000 a month. How should this $4,000 be treated? (1) Include it as an externality Ignore it as an externality Include it as an opportunity cost Ignore it as an opportunity cost QUESTION 9 Which of the following is our best quick estimate of cash flows? (Hint: Think about which one excludes noncash expenses.) Sales EBIT EBITDA Net income QUESTIONLO QUESTION 10 Which of the following best describes realized return? Guess Historical Risk O Liquidity QUESTION 11 Assume you have the choice between the following 2 projects for a firm that faces a WACC of 10%. Assuming the projects are mutually exclusive, which of the following is true? (1) A NPV = $500 B NPV = $800 IRR = 14% IRR = 12% O Accept A only since it has a higher IRR O Accept B only since it has a higher NPV O Accept both A and B since both have an acceptable NPV and IRR Accept neither A nor B since neither have an acceptable NPV or IRR