Question
Question 61 The market value of a firm that invests in projects providing a return equal to its WACC should decrease over time. Select one:
Question 61
The market value of a firm that invests in projects providing a return equal to its WACC should decrease over time.
Select one:
True
False
Question 62
A firm has $500 in debt at a cost of 7%, a 34% tax rate, a total firm value of $1.000, and an unlevered return of 11.5%. What is the WACC?
Select one:
a. 11.84%
b. 10.57%
c. 9.72%
d. 9.55%
e. 11.41%
Question 63
An increase in the corporate tax rate decreases the value of the depreciation tax shield, all else equal.
Select one:
True
False
Question 64
If a firm uses cash to purchase inventory, its quick ratio will remain unchanged.
Select one:
True
False
Question 65
For a project with an initial investment of $38,000 and cash inflows of $10,500 a year for five years, calculate NPV given a required return of 10%/year.
Select one:
a. $655
b. -$1,205
c. $1,803
d. $888
e. $1,103
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