Question

Which of the following is not one of the considerations given to capital budgeting proposals?

Select one:

A. Whether there is an immediate need to replace or repair critical assets

B. Whether the proposal is in compliance with capital budgeting policies

C. Whether the proposal would meet the established minimum return on capital

D. Whether the proposal is congruent with the firm's long-term goals

E. All of the above are considerations given to capital budgeting proposals

Which of the following affect the weighted average cost of capital?

Select one:

A. Interest on bank loans

B. Dividends expected by investors

C. Expected increases in the value of stock in the company

D. Bond interest payments

E. All of the above

The present value of an ordinary annuity is:

Select one:

A. The amount that would be paid today in order to receive a series of unequal payments in the future

B. The amount that would be paid today in order to receive a series of equal payments in the future

C. The amount that would be paid in the future in order to receive a series of unequal payments leading up to that point

D. The amount that would be paid in the future in order to receive a series of equal payments leading up to that point

E. None of the above

The present value of a single sum is:

Select one:

A. The amount that would be paid today to receive a single amount at a specified date in the future

B. The amount that would be paid today to receive a single amount at an unspecified date in the future

C. The amount that would be paid at a specified date in the future to receive a single amount today

D. The amount that would be paid at an unspecified date in the future to receive a single amount today

E. None of the above

Answer 1

1.

A. Whether there is an immediate need to replace or repair critical assets

B. Whether the proposal is in compliance with capital budgeting policies

C. Whether the proposal would meet the established minimum return on capital

D. Whether the proposal is congruent with the firm's long-term goals

All the above four are important considerations given to capital budgeting proposals.

Therefore,

The correct answer is E. All of the above are considerations given to capital budgeting proposals

2.

The following does not affect the weighted average cost of capital:

C. Expected increases in the value of stock in the company

3.

The present value of an ordinary annuity is:

B. The amount that would be paid today in order to receive a series of equal payments in the future

4.

The present value of a single sum is:

A. The amount that would be paid today to receive a single amount at a specified date in the future