Quiz Ch 09 – T/F Relationship Between Discount Rates and Project Duration
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
True or false: Longer-term projects are best evaluated using higher discount rates.
True or false: Longer-term projects are best evaluated using higher discount rates.
True or false: High betas are often associated with companies having substantial fixed costs in comparison to project values.
True or false: Evaluating risky projects is possible by discounting expected cash flows at a rate adjusted for risk.
True or false: A less dependable estimate and a wider confidence interval are indicated in a heightened standard error in the beta estimate.
True or false: Typically, the risk-free rate is advised to be represented by the short-term Treasury bill rate.
True or false: Any project undertaken by the company should be discounted at the company’s cost of capital.
Which type of project typically has average total risk?