1. � With independent projects, NPV and IRR provide identical accept/reject decisions. If, however, you have two mutually exclusive projects to evaluate, the most accurate thing you could say about the eventual results is that: 2. � Internal rate of return (IRR) and net present value (NPV) methods: 3. � The final step in the capital budgeting process is 4. � The stage in the capital budgeting process that involves applying the appropriate capital budgeting techniques to help make a final accept or reject decision is called the _____________ stage. 5. � Which one of the following capital-budgeting evaluation techniques is based on finding a discount rate which causes the net present value to be zero? 6. � The process of allocating funds among competing investment opportunities is referred to as: 7. � Which one of the following best explains the impact on a firm that accepts a project with a negative NPV? 8. � When considering the time value of money, which of the following four methods of project evaluation would appear to be the least satisfactory? 9. � When the net present value for a project is negative, the internal rate of return is _________ the cost of capital. 10. The relevant cash flows of a project do not include which one of the following? 11. Of the components shown below, which is least likely to be of value in calculating the cost of preferred stock? 12. A firm’s mix of debt and equity defines the firm’s: 13. When retained earnings are used up and new common stock is issued, we know that the cost of: 14. As a general rule, the capital structure that maximizes stock price also: 15. A firm’s degree of combined leverage can be measured as degree of operating leverage __________ the degree of financial leverage: 16. The estimate of how quickly a firm may grow by maintaining a constant mix of debt and equity is called: 17. A firm’s business risk is measured by the variability in which one of the following over time: 18. The hypotheses that states that firms try to time the market by issuing stocks when stock prices are high and repurchasing shares when prices are low is called: 19. A decrease in the debt ratio will normally have no effect on: 20. The degree of financial leverage measures the sensitivity of __________ to changes in __________.
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