Which combination of investment policy and financing policy related to working capital provides the highest potential for greater profits but entails the greatest risk? a. relaxed, conservative b. relaxed, aggressive c. restricted, conservative d. restricted, aggressive

Q: When the profitability of total capital (total assets) is positive, which proposal does it agree…

A: The question is asking which statement is most likely to be true when the profitability of total…

Q: Which two types of investment criteria are most frequently used by managers today? Multiple Choice O…

A: Net Present Value (NPV) is the difference between present value of cash inflows and present value of…

Q: Value One category of capital investment evaluation methods does not use present value. The primary…

A: Cash Pay Back Method and Accounting Rate of Return are two Traditional methods of capital budgeting.…

Q: Asset allocation is performed to A) reduce the load that intermediaries charge maximize the earning…

A: Asset Allocation means the process of allocating money across different financial assets (such as…

Q: 3. As an investor, you are interested in creating a portfolio of assets that can reduce the overall…

A: A portfolio of assets are a combination of different assets which are such that they reduce the…

Q: a. What is the meant beta (β)? How would you interpret if β=1, β>1 and β<1?

A: Beta coefficient shows the systematic risk of the assets. The beta factor shows the systematic risk…

Q: Which of the following is not a determinant of investment? a) The efficiency of capital equipment…

A: To increase capital assets, business do investments in property, fixed assets, financial market,…

Q: If a firm is using financial leverage successfully, the ROE should be a. higher than the profit…

A: Answer is option b) Higher than ROA Financial leverage = Earnings Before Interest and Taxes /…

Q: Q.3. Differentiate among the following approach to working capital management: 1. Conservative…

A: The main aim of the company will be to increase the profits of the company. The profits will be…

Q: Capital investment decisions often involve all of the following: qualitative factors or…

A: Solution Introduction Capital investment means investment in capital assets The capital assets are…

Q: atement regarding value of a firm is correct? Select one: a. Firm value is created when the firm…

A: The cost of capital is indeed the minimal rate of return a company must achieve before it may…

Q: Which of the following investment objectives that is usually seeks to keep account values stable?…

A: Investors have different options to make investments, and the motive behind investments is to…

Q: Based on the assumption efficient capital market is characterized by rationality and risk aversion,…

A: When a business attempts to maximize the wealth of their firm, they are really attempting to build…

Q: Why is it preferred to have assets with negatively correlated returns in a well-diversified…

A: Correlation means degree to which two variance move in coordination of each other.  Correlation is…

Q: Distinguish between active and passive investment management styles. What   are the advantages of…

A: Active and passive investment management are two distinct styles of managing investment portfolios.…

Q: Which important function of management needs huge capital and have a long-term effect Select one: a.…

A: Management is an act or process of performing planning, organizing, staffing, directing, and…

Q: None

A: 4. Recommendation Since the expected rate of return (10%) is higher than the WACC (6.26%), the…

Q: Questions about Costs of Capital. Which of the following is true: 1. Cost of Equity is lower than…

A: Cost of equity is lower than cost of debt because equity holders face higher risk than debt…

Q: True or False Investment bankers and other valuation professionals often utilize relative valuation…

A: Long term investments are the investment or assets that are beneficial for the firm for a number of…

Q: For a firm, the Optimal Capital Structure means to choose between equity and bonds so to   a.…

A: Optimal capital structure is that mix of debt and equity that enables a company to maximize its…

Q: The Cost of capital is the Select one: a. Average expected return on capital b. Highest expected…

A: Businesses and corporations operate on a large scale and require funds every now and then to fuel…

Q: Implied cost of capital approach can be used in determining the discount rate in equity valuation:.…

A: The implied cost of capital approach will be focusing upon finding out a discount rate which will be…

Q: not an advantage of the NPV investment appraisal technique

A: Option A is wrong because increase in shareholder wealth is an advantage of NPV investment appraisal…

Q: Suppose a firm invest in proects that are much riskier than its average investments. Do you think…

A: A firm funds its investments either with shareholders' equity or debt. One of the major criteria…

Q: If investors are less certain about the economic outlook, they will: Select one: O a. raise capital…

A: Following is the correct answer

Q: Speculation tends to have a high risk and high rate of return compared to investment Select one: O…

A: The main target in both the cases are making profit, however there are major differences between the…

Q: Venture capital is a.debt resource  b. Profit resource  c. Internal financial resource d.…

A: The correct option with proper explanation are as follows

Q: The calculation of a hurdle rate when looking capital expenditures involves looking at what…

A: Generally companies take up new projects only when the project passes the hurdle rate (HR). As the…

Q: Which of the following term LPs prefer? Committed capital as carry basis. Investment capital as…

A: LPs (Limited Partners) typically prefer committed capital as carry basis. Carry, or carried…

Q: Identify which one of the following is not the importance of capital market? a. Effective…

A: Capital markets are very important for countries to grow business and mobilize money.

Q: The cost of capital can be thought of as the rate of return required by investors in the firm's…

A: The objective of the question is to determine whether the statement 'The cost of capital can be…

Q: management

A: Working capital management is a strategy that is used by the company in order to ensure efficiency…

Q: A good current and quick ratio are a guarantee of excellent working capital management strategies.…

A: Working capital management involves the management and control of the gross current assets. The…

Q: Identify the corect statement: O H EBIT is expected to be below the indifference point, the firm…

A: EBIT - EPS indifferent point is the EBIT level at which EPS is same

Q: If the firms earns rate of return on its investments equal to the required rate of return it is…

A: The rate of return on its investments reflects the return earned on the given investment by the…

Q: . Leverage involves using fixed costs to magnify the potential return to a firm. Explain the hedging…

A: Answer:-  Leverage meaning:- Leverage is one of the investing technique that generally involves…