.The rate that a company must pay to obtain funds from creditors and stockholders is known as the
b.cost of capital
d.all of these
26.The higher the risk element in a project,the
a.more attractive the investment
b.higher the net present value
c.higher the cost of capital
d.higher the discount rate
27.If a company’s required rate of return is 10%and, in using the net present value method,a project’s net present value is zero,this indicates that the
a.project”s rate of return exceeds10%
b.project’s rate of return is less than the minimum rate required
c.porject earns a rate of return of 10%
d.project earns a rate of return of 0%
28.If a preoject has a profitability index of1.20,then the project’s internal rate of return is
a.equal to the discount rate
b.less than the discount rate
c.greater than the discount rate
d.equal to 20%
31.which one of the following affects cash during a period?
a.Recording depreciation expense
b.Declaration of a cash dividend
c.write-off of an uncollectible account receivable
d.Payment of an accounts payable
32.In calculating cash flows from operating activities using the indirect method,a gain on the sale of equipment is
a.added to net income
b.deducted from net income
c.ignored because it does not affect cash
d.not reported on a statement of cash flows
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