Corporate Finance UPDATED Exam Questions and CORRECT Answers
Valuation principleState that we can use current market prices to determine the value today of the costs and benefits associated with a decision Net present value ruleThe main tool of project evaluation where we weigh the costs and benefits at different points in time and apply this information to decisions Time value of moneyThe difference in value between money today and money in the future i.e. investment Discount rateThe risk-free interest-rate NPV decision ruleWhen making an investment decision take the alternative with the highest NPV. Choosing this alternative is equivalent to receiving it's NPV in cash today Accept projectsWith positive NPV
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