______12) Using semi-annual compounding (vs. annual compounding) will increase t
ID: 2722967 • Letter: #
Question
______12) Using semi-annual compounding (vs. annual compounding) will increase the future value of an annuity. _____ 13) The internal rate of return (IRR), emphasizes the average annual rate of return from the investment. ______ 14) Non-mutually exclusive alternatives can often be accepted at the same time. ______ 15) The payback method of capital budgeting considers all inflows from the project. ______ 16) The internal rate of return (IRR) is the interest rate that equates the cash outflows of an investment with the cash inflows from it. _____ 17) Junk Bonds usually have high risk with low return yields. _____ 18) Derivative contracts can be very complex and highly volatile. ______ 19) Working capital management is relatively less important for the small business (compared to larger ones). ______ 20) The financial manager usually must spend significant time on working capital management. ______ 21) Commercial paper is a secured short-term IOU issued by a large firm. ______ 22) If a firm uses factoring for its accounts receivables, it will generally be liable if the account becomes uncollectible. ______ 23) Trade credit is for periods of one year or more from suppliers. ______ 24) There is an inverse relationship between the price of bonds and interest rates. ______ 25) When interest rates increase, bonds are more likely to be called.
Explanation / Answer
12) Using semi-annual compounding (vs. annual compounding) will increase the future value of an annuity. True
13) The internal rate of return (IRR), emphasizes the average annual rate of return from the investment. False, IRR is the rate of return at which NPV is zero
14) Non-mutually exclusive alternatives can often be accepted at the same time. True
15) The payback method of capital budgeting considers all inflows from the project. True
16) The internal rate of return (IRR) is the interest rate that equates the cash outflows of an investment with the cash inflows from it. True
17) Junk Bonds usually have high risk with low return yields. False
18) Derivative contracts can be very complex and highly volatile. True
19) Working capital management is relatively less important for the small business (compared to larger ones). False as Working capital is important fo every company
20) The financial manager usually must spend significant time on working capital management. True
21) Commercial paper is a secured short-term IOU issued by a large firm. True
22) If a firm uses factoring for its accounts receivables, it will generally be liable if the account becomes uncollectible. False
23) Trade credit is for periods of one year or more from suppliers. False
24) There is an inverse relationship between the price of bonds and interest rates. True
25) When interest rates increase, bonds are more likely to be called. True
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.