finance exam 5

internal rate of return

Which of these is a capital budgeting technique that generates decision rules and associated metrics for choosing projects based upon the implicit expected geometric average of a project's rate of return?

the relative sizes of the total market capitalizations for each kind of security that the firm issues

Which of these makes this a true statement? When determining the appropriate weights used in calculating a WACC, it should reflect

net present value

a capital budgeting technique that generates a decision rule and associated metric for choosing projects based on the total discounted value of their cash flows

cash inflow

a decrease in net working capital (NWC) is treated as:

Accelerated depreciation

allows firms to receive more of the dollars of depreciation earlier in the asset's life

sunk cost

if a firm has already paid an expense or is obligated to pay one in the future, regardless of whether particular project is undertaken that expense is a

cash flows that occur after payback

neither payback period nor discounted payback period techniques for evaluating capital projects for

equivalent annual cost approach

the best approach to convert an infinite series of asset purchases into perpetuity is known as the

currency

the net present value decision technique uses a statistic denominated in

flotation costs

these are fees paid by firms to investment bankers for issuing new securities

pro forma analysis

this is the process of estimating expected future flows of a project using only the relevant parts of the balance sheet and income statement

free cash flow

this is used as a measure of the total amount of available cash flow from a project

payback

this technique for evaluating capital projects tells how long it will take a firm to earn back the money invested in project

market values

when calculating the weighted average cost of capital, weights are based on