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define why we measure a projectrsquos risk as the change in the cvwe calculate a projectrsquos risk as the change in the coefficient of variation
why is the coefficient of variation a better risk calculates to use than the standard deviation while evaluating the risk of capital budgeting
explain how to measure the firm risk of a capital budgeting projectthe firm risk of a capital budgeting project calculates the impact of adding a new
what is capital rationing should a firm practice capital rationing whythe term capital rationing is the practice of setting dollar limits on
what is the decision rule for accepting or rejecting proposed projects while using internal rate of returnwhile the internal rate of return is
what is the decision rule for accepting or rejecting proposed projects while using net present valuewhile using the net present value decision rule
provide three examples of mutually exclusive projectsmutually exclusive projects are projects which participate against each other for our
what are the advantages and disadvantages of the internal rate of return methodthe internal rate of return irr method is a discounted cash flow
how does the net present value relate to the value of the firmthe net present value npv is the dollar amount of the change to the value of the
how do we calculate the payback period for a proposed capital budgeting project what are the major criticisms of the payback methodwe compute the
for a specified ios and mcc how do financial managers decide that which proposed capital budgeting projects to accept and which to rejectfor a
what is a marginal cost of capital schedule mcc is the schedule all the time a horizontal line explainthe mcc schedule is a graphic depiction
if dividends paid to common stockholders are not legal obligations of a corporation is the cost of equity zero describe your answereven though
what is the investment opportunity schedule ios how does it help financial managers make business decisionsthe investment opportunity schedule
how do tax considerations affect the cost of debt and the cost of equityas interest on debt is tax deductible to the issuing firm as much higher the
what does the ldquoweightrdquo refer to in the weighted average cost of capitalthe weight considered to in weighted average cost of capital consider
when a company issues new securities how do flotation costs affect the cost of raising that capitalwhile a company issues new securities flotation
which is lower for a given company the cost of debt or the cost of equity explain ignore taxes in your answerthe cost of debt is all the time
step 1 opportunity set graphcombine 2 of your stocks ignore the other 2 stocksfor this step only construct an investment opportunity set the
which formula would you use to solve for the payment needed for a car loan if you know the interest rate length of the loan and the borrowed
how does continuous compounding benefit an investorthe influence of increasing the number of compounding periods every year is to increase the future
monthly returns you now need to calculate the monthly periodic returns for all three stocks and the sampp index adapting the holding period
what is an annuity an annuity is a series of equivalent cash flows spaced consistently over
how is present value influenced by a change in the discount ratepresent value is oppositely related to the discount rate alternatively present
what is compound interest compare compound interest to discountingcompound interest takes place while interest is earned on interest and on the