Q- A proposed project has a positive net present value. If this project is accepted, then:

a-the firm made an incorrect accept/reject decision.

b-shareholder wealth will increase.

c-shareholder wealth will remain constant.

d-the value of the firm will decrease.

f-the value of the firm will remain constant.

Q-

Projects A and B are mutually exclusive, have positive net present values and required discounted payback periods that exceed the projected discounted payback periods. Which project(s), if either, should the firm accept?

a-Both A and B

b-Neither A nor B

c-A, but not B

d-B, but not A

f- Either A or B but not both A and B

Q-

Net working capital:

a-can be ignored in project analysis because any expenditure is normally recouped by the end of the project.

b-requirements generally, but not always, create a cash outflow at the beginning of a project.

c-expenditures commonly occur at the end of a project.

d-is ignored in project analysis because any change in net working capital is a sunk cost.

f-is the only expenditure where at least a partial recovery can be made at the end of a project.

Q- Beta values are highly dependent on the:

a-direction of the market movement.

b-overall cycle of the market.

c-variance of the market and asset, but not their co-movement.

d-covariance of a security with the market.

f-market risk premium.