Cash flows that should be considered for decision in hand are classified as____________?

A: Relevant cash flows

B: Irrelevant cash flows

C: Marginal cash flows

D: Transaction cash flows

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Relevant cash flows

Project which is started by firm for increasing sales is classified as______________?

A: New expansion project

B: Old expanded project

C: Firm borrowing project

D: Product line selection

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New expansion project

Cost which has occurred already and not affected by decisions is classified as______________?

A: Sunk cost

B: Occurred cost

C: Weighted cost

D: Mean cost

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Sunk cost

Cost of common stock is 16% and bond yield is 9% then bond risk premium would be_________?

A: 7%

B: 8%

C: 1.78%

D: 25%

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7%

Cost of capital is equal to required return rate on equity in case if investors are only__________?

A: Valuation manager

B: Common stockholders

C: Asset seller

D: Equity dealer

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Common stockholders

A type of beta which incorporates about company such as changes in capital structure is classified as___________?

A: Industry Beta

B: Market Beta

C: Subtracted Beta

D: Fundamental Beta

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Fundamental Beta

Return on assets = 6.7% and equity multiplier = 2.5% then return on equity will be ______________?

A: 16.75%

B: 2.68%

C: 0.37%

D: 9.20%

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16.75%

An uncovered cost at start of year is divided by full cash flow during recovery year then added in prior years to full recovery for calculating__________?

A: Original period

B: Investment period

C: Payback period

D: Forecasted period

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Payback period

In capital budgeting, an internal rate of return of project is classified as its__________?

A: External rate of return

B: Internal rate of return

C: Positive rate of return

D: Negative rate of return

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Internal rate of return

An investor who writes stock call options in his own portfolio is classified as__________?

A: Due option

B: Covered option

C: Undue option

D: Uncovered option

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Covered option

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