1. we incorporate risk into our calculations in evaluating investments in long-term assets as:
A) Discounted Rate
B) Higher annual return on the project
C) Inflation rate.
D) A and B
E) A, B and C
2. Projects selection using a technique that satisfies all the criteria will, under most conditions.
a) Minimize owner’s wealth
B) Maximize owner’s wealth
C) Indifferent to our investment decision.
D) All the above
3. Suppose with an initial cost of investment of $ 5,000 you calculate a project’s net present value to be $1,000. What does it mean
a) We accept to increase the value of the firm by $6,000
b) We accept to increase the value of the firm by $5,000
C) We accept to increase the value of the firm by $4,000
d) We accept to increase the value of the firm by $1,000