FINC 5000 Week 9 Final Exam Part A Answers (Webster University) (Study Guide) 2021/22_Guaranteed 100% Score.

2/29/2016 Week 9: Final, Part A > (T/F & MC): FINC 5000 OC S1 2016 Finance


Submission Details:
Score for this quiz: 40 out of
40 Time: 65 minutes
Submitted Feb 29 at 9:41am Current Score: 40 out of 40
This attempt took 65 minutes. Kept Score: 40 out of 40


Question 1 pts



A firm should use up existing retained earnings to finance projects before
going outside to borrow or issue new stock because, since it already has the
money, that is the cheapest financing source available.



True

Correct! False




Question 2 pts


Firms should use their weighted average cost of capital
(WACC) when they are funding their capital projects
from a variety of financing sources. However, when the
firm plans on using only a single debt or equity source
to fund a particular project, it should use the after­
tax cost of that specific source of capital to evaluate
that project.




True


Correct! False


False: Correct.




Question 3 pts

https://worldclassroom.webster.edu/courses/1257339/quizzes/1675732 1/13

, 2/29/2016 Week 9: Final, Part A > (T/F & MC): FINC 5000 OC S1 2016 Finance



If a proposed investment has an NPV of zero, it means that you can expect
to get a zero percent return from it if it is adopted.


True

Correct! False




Question 4 pts


Conflicts between two mutually exclusive projects,
where the NPV method chooses one project but the IRR
method chooses the other, should generally be resolved
in favor of the project with the higher NPV.




Correct! True


True: Correct.



False




Question 5 pts


Whenever a firm goes into debt, it is using financial
leverage.




Correct! True


True: Correct.



False

https://worldclassroom.webster.edu/courses/1257339/quizzes/1675732 2/13