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Q: 15) Which of the following is considered to be a spontaneous source of financing? A. Operating leases B. Accounts receivable C. Inventory D. Accounts payable
A: B. Accounts receivable
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User: 15) Which of the following is considered to be a spontaneous source of financing? A. Operating leases B. Accounts receivable C. Inventory D. Accounts payable

Weegy: B. Accounts receivable
justpretty|Points 1445|

User: Compute the payback period for a project with the following cash flows, if the company’s discount rate is 12%. Initial outlay = $450 Cash flows: Year 1 = $325 Year 2 = $65 Year 3 = $100 A. 3.43 years B. 3.17 years C. 2.88 years D. 2.6 years

Weegy: D. 2.6 years
jeifunk|Points 6237|

User: For the NPV criteria, a project is acceptable if the NPV is __________, while for the profitability index, a project is acceptable if the profitability index is __________. A. less than zero, greater than the required return B. greater than zero, greater than one C. greater than one, greater than zero D. greater than zero, less than one

Weegy: A. less than zero, greater than the required return
essesema|Points 40|

User: Which of the following is considered to be a deficiency of the IRR? A. It fails to properly rank capital projects. B. It could produce more than one rate of return. C. It fails to utilize the time value of money. D. It is not useful in accounting for risk in capital budgeting

Weegy: B. It could produce more than one rate of return.
jeifunk|Points 6237|

User: The firm should accept independent projects if A. the payback is less than the IRR B. the profitability index is greater than 1.0 C. the IRR is positive D. the NPV is greater than the discounted payback

User: The most expensive source of capital is A. preferred stock B. new common stock C. debt D. retained earnings

Weegy: A. preferred stock
scijoe21|Points 2165|

User: The most expensive source of capital is A. preferred stock B. new common stock C. debt D. retained earnings

Weegy: A. preferred stock
scijoe21|Points 2165|

User: The cost associated with each additional dollar of financing for investment projects is A. the incremental return B. the marginal cost of capital C. risk-free rate D. beta

User: The XYZ Company is planning a $50 million expansion. The expansion is to be financed by selling $20 million in new debt and $30 million in new common stock. The before-tax required rate of return on debt is 9%, and the required rate of return on equity is 14%. If the company is in the 40% tax bracket, what is the marginal cost of capital? A. 14.0% B. 9.0% C. 10.6% D. 11.5%

Weegy: A. 14.0%
Saswata Bhattacharya|Points 134|

User: Shawhan Supply plans to maintain its optimal capital structure of 30% debt, 20% preferred stock, and 50% common stock far into the future. The required return on each component is: debt–10%; preferred stock–11%; and common stock–18%. Assuming a 40% marginal tax rate, what after-tax rate of return must Shawhan Supply earn on its investments if the value of the firm is to remain unchanged? A. 18.0% B. 13.0% C. 10.0% D. 14.2%

Weegy: B. 13.0%
Saswata Bhattacharya|Points 134|

User: Lever Brothers has a debt ratio (debt to assets) of 40%. Management is wondering if its current capital structure is too conservative. Lever Brothers’ present EBIT is $3 million, and profits available to common shareholders are $1,560,000, with 342,857 shares of common stock outstanding. If the firm were to instead have a debt ratio of 60%, additional interest expense would cause profits available to stockholders to decline to $1,440,000, but only 228,571 common shares would be outstanding. What is the difference in EPS at a debt ratio of 60% versus 40%? A. $1.75 B. $2.00 C. $3.25 D. $4.50

Weegy: $3.25 is the difference in EPS at a debt ratio of 60% versus 40%
ephraimzRN|Points 2268|

User: Zybeck Corp. projects operating income of $4 million next year. The firm’s income tax rate is 40%. Zybeck presently has 750,000 shares of common stock which have a market value of $10 per share, no preferred stock, and no debt. The firm is considering two alternatives to finance a new product: (a) the issuance of $6 million of 10% bonds, or (b) the issuance of 60,000 new shares of common stock. If Zybeck issues common stock this year, what will be the projected EPS next year? A. $4.94 B. $2.96 C. $5.33 D. $3.20

Weegy: B. $2.96
emem0910|Points 235|

User: _________ risk is generally considered only a paper gain or loss. A. Transaction B. Translation C. Economic D. Financial

User: Capital markets in foreign countries A. offer lower returns than those obtainable in the domestic capital markets B. provide international diversification C. in general are becoming less integrated due to the widespread availability of interest rate and currency swaps D. have been getting smaller in the past decade

Weegy: C. in general are becoming less integrated due to the widespread availability of interest rate and currency swaps
chikaygoods|Points 230|

User: What keeps foreign exchange quotes in two different countries in line with each other? A. Cross rates B. Forward rates C. Arbitrage D. Spot rates

Weegy: A. Cross rates
scijoe21|Points 2165|

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Asked 9/5/2012 7:49:10 PM
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