Question
Tim has $100 in a bank account paying 2% interest per year. At the end of 5 years, Tims bank account balance will be $110
Tim has $100 in a bank account paying 2% interest per year. At the end of 5 years, Tims bank account balance will be $110 if interest is not compounded, but will be greater than $110 if interest is compounded. Select one: True False.A company that wants to maximize earnings per share may either over sell assets or Pay off debt. Select one: True False.John invested $1,000 in a risky investment and Bill invested $1,000 in a less risky investment. One year later, Bill's investment is worth $1,030. Which of the following statements is most correct? Select one: a. John's investment must be worth more than $1,030 because of the risk-return tradeoff, given that John's investment was more risky. b. If John's investment is worth more than $1,030, then Bill was irrational to invest in the less risky investment. c. The worth of John's investment cannot be determined with the information given. d. If John's investment is worth less than $1,030, then John was irrational to invest in the risky project..One of the benefit of the pay back period is that it focuses on the timing of the project`s benefits and costs, even though it does not adjust the cash flows for the time value of money Select one: True False.
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