Which of the following statements about NPV and IRR is least accurate?
A. The IRR is the discount rate that equates the present value of the cash inflows with the present value of outflows.
B. For mutually exclusive projects,if the NPV method and the IRR method give conflicting rankings,the analyst should use the IRRs to select the project.
C. The NPV method assumes that cash flows will be reinvested at the cost of capital,while IRR rankings implicitly assume that cash flows are reinvested at the IRR.
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Which of the following would most likely be considered a poor corporate practice in terms of promoting shareholder interests?
A. The firm can use “share blocking.”
B. The firm uses a third party to tabulate shareholder votes.
C. Voting for board members does not allow cumulative voting by shareholders of all votes allotted to their shares.
Which of the following board members would most likely be considered well chosen based on the principles of good corporate governance?
A board member of Company B who is also the CEO of Company B.
B. A board member of Company B who is a partner in an accounting firm that competes with the firms auditor.
C. A board member of Company A who is president of Company B,when the CFO of Company A sits on Company Bs board.
The cost of preferred stock is equal to:
A. The preferred stock dividend divided by its par value.
B. [(1-tax rate) times the preferred stock dividend] divided by price.
C. The preferred stock dividend divided by its market price.
Blonnick Corp. has found that its weighted average collection period has increased from 50 days last year to 55 days this year, and its average days of receivables this year is 48 compared to 52 last
A. Blonnick has relaxed its credit standards this year.
Blonnicks credit customers are paying more slowly this year.
Credit sales are a greater part of Blonnicks business this year.