CORPORATE FINANCE EXAM 4 QUESTIONS AND CORRECT DETAILED ANSWERS (ALL GRADED

CORPORATE FINANCE EXAM 4
QUESTIONS AND CORRECT
DETAILED ANSWERS (ALL GRADED
A+)



capital budgeting - CORRECT ANSWER (S) -the process of planning for purchases of

assets whose returns are expected to continue beyond one year




capital expenditure - CORRECT ANSWER (S) -a cash outlay that is expected to

generate a flow of future cash benefits lasting longer than one year




capital expenditures - CORRECT ANSWER (S) -usually range from 2 to 10 percent

, cost of capital - CORRECT ANSWER (S) -the cost of the funds (debt, preferred and

common equity) supplied to it and used to finance investments made by a

company. *aka the required rate of return




cost of capital - CORRECT ANSWER (S) -priveds a firm with a basis for choosing

among vaious capital investment projects




projects when making capital expenditure decisions - CORRECT ANSWER (S) -

independent projects, mutually exclusive projects, contingent projects




independent project - CORRECT ANSWER (S) -one whose acceptance or rejection

does not directly eliminate other projects from consideration




mutually exclusive projects - CORRECT ANSWER (S) -one whose acceptance

precludes the acceptance of one or more alternative proposals