1. The NPV rule states that you should accept an investment if the NPV:
a. is less than or equal to zero.
b. is less than the investment's initial cost.
c. is positive.
d. exceeds the investment's initial cost.
e. is negative.
2. The optimal capital structure for a company the uses some debt to fund its operations:
a. is the mixture of debt and equity financing that minimizes the weighted average cost of capital.
b. consists of equal amounts of debt and equity financing.
c. is 100 percent equity financing.
d. is 100 percent debt financing.
e. is the mixture of debt and equity financing that minimizes the firm's aftertax cost of debt.
3. The Internal Rate of Return decision rule states that a project should be accepted if its IRR:
a. exceeds the IRRs of all other potential projects.
b. is equal to zero.
c. exceeds the required rate.
d. is equal to or greater than 1.0.
e. is greater than the AAR.