Quiz Ch 08 – Opportunity Cost of Capital
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
What is the equivalent of the opportunity cost of capital?
What is the equivalent of the opportunity cost of capital?
What is the opportunity cost of capital for a project?
What is the term for the ratio of net present value to the initial investment?
If the cost of capital exceeds the project’s IRR, what will be the financial outcome of the project?
True or false: The payback period takes into consideration all the cash flows associated with a project.
True or false: In the process of project selection using a profitability index, a high value is favored over a low value.
True or false: The shareholder wealth is reduced by the project’s cost in an NPV of zero result projects.
True or false: A decrease in the opportunity cost of capital leads to an increase in the net present value of a project.
True or false: A risky dollar is typically valued more highly than a safe dollar.
Under what circumstances does the investment timing problem become a concern?