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Hey guys, can I get some help with the following questions? Indicate the answer choice that best completes the statement or answers the question. 1.
Hey guys, can I get some help with the following questions?
Indicate the answer choice that best completes the statement or answers the question. 1. Additional funds needed (AFN) will be negative if a. assets that can be acquired only in large, discrete amounts are acquired. b. the plant and equipment of the firm is increased to achieve additional growth. c. the amount of internal financing expected is decreased because of an increase in operations of the firm. d. there are economies of scale in the use of many types of assets. e. the amount of internally generated funds is more than sufficient to support the forecasted increase in sales. 2. Which of the following methods involves calculating an average beta for firms in a similar business and then applying that beta to determine the beta of its own project? a. Sensitivity Analysis b. Pure play method c. Accounting beta method d. Capital asset pricing model (CAPM) method e. Net present value (NPV) analysis 3. Which of the following statements is correct? a. If a firm's stockholders are well diversified, we know from theory and from studies of market behavior that corporate risk is not important. b. Undiversified stockholders, including the owners of small businesses, are more concerned about corporate risk than market risk. c. Empirical studies of the determinants of required rates of return (k) have found that only market risk affects stock prices d. Market risk is important but does not have a direct effect on stock price because it only affects beta. e. Market risk does not play any role in determining the rate of return on an investment. 4. Orangetree Pharma's demand for test tubes is 72,000 units. If the lead time for placing an order is 5 days, then an order should be placed at an inventory level of: (Assume 360 days in a year) a. 625 units. b. 800 units. c. 1,250 units. d. 1,000 units. e. 2,500 unitsStep by Step Solution
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