36. When financial managers are making investment and financing decisions they b

Question

36. When financial managers are making investment and financing decisions they base their decision on a. changes in sales revenues b. Earnings Before Interest and Taxes (EBIT) c. cash flows d. Net Income 37. When a company asks a bank to approve a line of credit, thi request is usually based on the company's cash budget a. True b. False 38. Most companies pay their dividends a. annually b. semi-annually c. quarterly d. monthly 39. Projects whose cash flows do not affect other projects' cash flows and, therefore, can be evaluated as stand-alone projects are called a. independent b. nonconventional (nonnormal) c. mutually exclusive d. certainty equivalents 40. The three elements of financial decision making are money, time, and risk. a. True b. False 41. The optimal capital structure for a company is the one which has the a. highest cost of capital b. lowest beta C. lowest cost of capital d. highest cost of equity

Explanation / Answer

36) c) Cash Flows

37) b) False

38) c) Quarterly

39) c) Mutually Exclusive

40) a) True

41) c) Lowest cost of Capital

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