FIN 370 - FIN 370 Final Exam Questions & Answers at UOP E Tutors

11) When firms use multiple sources of capital, they need to calculate
the appropriate discount rate for valuing their firm's cash flows
as__________.
they apply to each asset as they are purchased with their respective
forms of debt or equity
a sum of the capital components costs
a simple average of the capital components costs
a weighted average of the capital components costs
12) You are trying to pick the least-expensive machine for your
company. You have two choices: machine A, which will cost $50,000 to
purchase and which will have OCF of -$3,500 annually throughout the
machine's expected life of three years; and machine B, which will cost
$75,000 to purchase and which will have OCF of -$4,900 annually
throughout that machine's four-year life. Both machines will be
worthless at the end of their life. If you intend to replace whichever type
of machine you choose with the same thing when its life runs out, again
and again out into the foreseeable future, and if your business has a cost
of capital of 14 percent, which one should you choose?
Neither machine A nor B
Both machines A and B
Machine B
Machine A
13) Financial plans include which of the following?
All of the above
Pro forma Income Statement, Balance Sheet
Short Term and Long Term Plan
Schedule of Sales, Expenses, and Capital Expenditure