fundamentals of corporate finance 11th canadian edition By Stephen A. Ross Test bank
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TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.1) The size, timing and risk of cash flows are important when evaluating a capital budgeting decision.
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2) A capital expenditure project becomes desirable when the project is worth more to the firm than the cost to acquire it.
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3) A capital expenditure project becomes desirable when the present value of the cash flow generated by the project exceeds the project's present value of cost.
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4) Optimal capital structure determines the least expensive sources of funds for the firm to borrow.
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5) Optimal capital structure determines how much debt the firm should have in relation to its level of equity.
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6) Capital structure determines the level of current assets that is required to maintain the firm's operations.
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7) Capital structure determines how much risk is associated with the future cash flows of a project.
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8) Determining when a supplier should be paid is a capital structure decision.
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9) Establishing the accounts receivable policies is a capital structure decision.
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10) Determining the amount of money to borrow to finance a 10-year project is a capital structure decision.
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11) Deciding if a new project should be accepted is a working capital decision.
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12) When evaluating a project in which a firm might invest, the size but not the timing of the cash flows is important.
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13) Working capital management addresses the firm's appropriate level of inventory.
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