Question 49 (1 point) The rate of growth in the horizon period is assumed to be

Question

Question 49 (1 point)

The rate of growth in the horizon period is assumed to be equal to or higher than it is in the analysis period.

Question 49 options:

True

False

Question 50 (1 point)

Which of the below is added back to EBIT in order to calculate Operating Cash Flow?

Question 50 options:

income tax expense

interest expense

accumulated depreciation

depreciation expense

Question 51 (1 point)

using the CAPM, the Required rate of Return is equal to Rf + (MRP x Beta)

Question 51 options:

True

False

Question 52 (1 point)

The only form of financing considered 'free' is the accounts payable balance.

Question 52 options:

True

False

Question 53 (1 point)

You deposit $5864 into a savings account that earns an APR of 3.30% compounded annually. What will be the balance in the account after 7 full years (assuming no further deposits)?

Your Answer:

Question 54 (1 point)

All short-term debt is considered temporary financing.

Question 54 options:

True

False

Question 55 (1 point)

A firm has two projects from which it is choosing. The firm should always select the project with the highest IRR.

Question 55 options:

True

False

Question 56 (1 point)

All else being the same, an annuity due would have a higher present value than an ordinary annuity, but a lower future value.

Question 56 options:

True

False

True

False

Explanation / Answer

49 Answer: True

Horizon period is considered to be having a higher growth rate when compared to the analysis period.

50 Answer: Depreciation expense

EBIT shall be added with non cash expense such as depreciation expenditure of current year in order to calculate the operating cash flow.

51 Answer: False

the formula shall be as follows: Re = Rf + beta x (Rm - Rf)

52 Answer: True

Accounts payable is gerally related to trade payables etc which is considered free source of financing of working capital.

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