Paper Topic:

Principles of Finance

Independent projects are not in direct competition with one another for the firm 's resources . True or False

A . True

B . False

Ans : B-false

2 . Steps in the capital budgeting process include misidentification underdevelopment , rejection , and liquidation . True or false

A . True

B . False

Ans : B-false

3 . Projects with negative net present values ultimately will lead to a decrease in the value of the firm . True or false

A . True

B . False

Ans : A-true

4 . The depreciation tax shield equals the amount of the depreciation

br expense multiplied by the firm 's tax rate . True or false

A . True

B . False

Ans : A-true

5 . Working capital is essentially a firm 's current assets and consists of cash , accounts receivable , inventories , plant and equipment . True or false ? REFERENCE : 8 .1

A . True

B . False

Ans : A-true

6 . The size of the accounts payable is affected by the level of the firm 's cost of goods sold and the average payment period . True or false ?A . True

B . False

Ans : A-true

7 . Because commercial rates are typically below U .S . Treasury bill rates , they are a valuable short-term financing source for high quality business firms . True or false

A . True

B . False

Ans : B-false

8 . The maturity matching approach is a financing strategy that attempts to match the maturities of assets with the maturities of the liabilities which they are financed . True or false

A . True

B . False

Ans : True

9 . An advantage of short-term borrowing is the need for frequent renewals...

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