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__________________ is the determination of the present dollar value of a series

ID: 2672457 • Letter: #

Question

__________________ is the determination of the present dollar value of a series of cash flows.
Liquidity analysis
Programming analysis
Shareholder wealth maximization
Valuation


11. The discount rate chosen in short-term financial decision making should always reflect:
the fluctuations of the company's past capital investments
the company's opportunity cost
the current overnight investment rate
the current long-term borrowing rate


12. With more frequent than annual compounding, the effective annual rate is ______________ than the nominal rate, due to the effect of ______________.
lower, rounding differences
lower, not earning "interest on interest"
higher, rounding differences
higher, earning "interest on interest"


13. Determining the Net Present Value (NPV) of a given course of action typically involves all of these steps EXCEPT:
determining the relevant cash flows
determining the timing of the cash flows
determining the probability of each cash flow
determining the appropriate discount rate
discounting the cash flows


14. It is most commonly assumed that the manager’s objective is to:
Minimizing the price of the firm’s common stock
Maximizing shareholder value
Maximize accounts receivables
Minimize accounts payables


15. A company's marketing manager is worried about ____________ stock-outs while production manger is concerned with _____________ stock-outs.
raw material, work-in-process
work-in-process, raw material
work-in-process, finished goods
finished goods, raw material and work-in-process

Explanation / Answer

10 Programming analysis 11 the current long-term borrowing rate 12 higher, rounding differences 13 determining the appropriate discount rate 14 Maximize accounts receivables 15 work-in-process, raw material