What do the net present value of an investment represents

Question

Questions:

Question 1
To reduce Agency Problems, executive compensation should be designed to:

Question 2
In the shareholder wealth maximization model, the value of a firm's stock is equal to the present value of all expected future ____ discounted at the stockholders' required rate of return.

Question 3
The primary objective of a for-profit firm is to ___________.

Question 4
The Saturn Corporation (once a division of GM) was permanently closed in 2009. What went wrong with Saturn?

Question 5
Various executive compensation plans have been employed to motivate managers to make decisions that maximize shareholder wealth. These include:

Question 6
A Real Option Value is:

Question 7
The flat-screen plasma TVs are selling extremely well. The originators of this technology are earning higher profits. What theory of profit best reflects the performance of the plasma screen makers?

Question 8
Possible goals of Not-For-Profit (NFP) enterprises include all of the following EXCEPT:

Question 9
Which of the following will increase (V0), the shareholder wealth maximization model of the firm:
V0·(shares outstanding) = Σ∞t=1 (π t ) / (1+ke)t + Real Option Value.

Question 10
Economic profit is defined as the difference between revenue and ____.

Question 11
The approximate probability of a value occurring that is greater than one standard deviation from the mean is approximately (assuming a normal distribution)

Question 12
The ____ is the ratio of ____ to the ____.

Question 13
The closest example of a risk-free security is

Question 14
Generally, investors expect that projects with high expected net present values also will be projects with

Question 15
A change in the level of an economic activity is desirable and should be undertaken as long as the marginal benefits exceed the ____.

Question 16
The primary difference(s) between the standard deviation and the coefficient of variation as measures of risk are:

Question 17
The level of an economic activity should be increased to the point where the ____ is zero.

Question 18
Based on risk-return tradeoffs observable in the financial marketplace, which of the following securities would you expect to offer higher expected returns than corporate bonds?

Question 19
The standard deviation is appropriate to compare the risk between two investments only if

Question 20
The net present value of an investment represents