Which of the following is TRUE? I. Internal rate of return (IRR) is a major method for determining the cost of equity. II. The cost of capital depends on the source of the funds. Group of answer choices I and II II only Neither I nor II I only
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- Which one of the following is an internal characteristic that can affect the value of an investment? O a. Political events. O b. Taxation policy. Oc Capital structure. O d. Inflation. (Chapter.2) ot dunrDetermining optimum capital structure is a. An investment decision b. A financing decision c. A dividend decision d. liquidity decisionCapital account transactions are not affected by Select one: a. Investment diversification b. Risk c. Rate of return d. All the answers are correct e. Speculation
- Working capital represents the portion of current assets financing through long term funds. This indicates 1. Net Working Capital 2. Gross Working capital Select one: O a. 2 is correct O b. Both 1 and 2 are correct O c. 1 is correct O d. Neither of the two are correctCapital Structure represents Select one: a. None of the options b. Assets and Liabilities c. All Liabilities d. Different forms of capital e. All AssetsThe modern financial management approach is Select one: O a. Working capital b. Efficient Utilization of funds c. None of the options O d. Procurement of funds e. Procurement of funds and efficient utilization of funds
- State TWO (2) factors that differentiate between the Rate of Return and Cost of Capital.Multiple choice: 1. Too large an investment in fixed capital may leave too little money for A. Working capital B. Settlements C. Compliance D. Requirements 2. Circulating capital A. Cash on hand B. Working capital C. Net balances D. Cash disbursementExplain return on invested capital (ROIC)
- To find NPV, it requires Choices: A.none of the choices B.discount rate and estimated cash flows C.investment amount plus discount rate D.discount rate and inflation rate E.estimated cash flow and capital structureWhat two components makeup the cost of using equity capital?What is the return on invested capital (RIC)?