Chapter 10 Question 4 The net present value a.will provide a direct measure of h

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Chapter 10 Question 4 The net present value a.will provide a direct measure of how much the firm value will change because of the capital project. b.is consistent with shareholder wealth maximization goal. c.all of these. d.uses the discounted cash flow valuation technique. Question 5 Which one of the following statements about the discounted payback method is NOT true? a.The discounted payback method represents the number of years it takes a project to recover its initial investment. b.The discounted payback method calls for the project to be accepted if the payback period is greater than a target period. c.The expected cash flows from the project are discounted at the cost of capital. d.The discount payback method is a risk indicator. Question 6 Projects that are classified as contingent could be mandatory or optional projects. a. False b. True

Explanation / Answer

4 c 5 c 6 d

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