69. Which of the following is least likely classified as an opportunity cost?
A. The cash savings related to adopting a new production process. B. The cash flows generated by an old machine that is to be replaced. C. The market value of vacant land to be used for a distribution center.
70. A capital project with a net present value (NPV) of $23.29 has the following cash flows:
69. Which of the following is least likely classified as an opportunity cost?
A. The cash savings related to adopting a new production process. B. The cash flows generated by an old machine that is to be replaced. C. The market value of vacant land to be used for a distribution center.
Answer: A “Capital Budgeting,” John D. Stowe, CFA, and Jacques R. Gagné, CFA 2009 Modular Level I, Volume 4, pp. 8-10 Study Session 11-44-b Discuss the basic principles of capital budgeting, including the choice of the proper cash flows and determining the proper discount rate. The cash savings related to adopting a new production process is an incremental cash flow, not an opportunity cost.
70. A capital project with a net present value (NPV) of $23.29 has the following cash flows:
72. An analyst gathers the following information about the cost and availability of raising various amounts of new debt and equity capital for a company:
72. An analyst gathers the following information about the cost and availability of raising various amounts of new debt and equity capital for a company:
78. A company’s optimal capital budget is best described as the amount of new capital required to undertake all projects with an internal rate of return greater than the:
A. marginal cost of capital. B. cost of new debt capital. C. weighted average cost of capital.
78. A company’s optimal capital budget is best described as the amount of new capital required to undertake all projects with an internal rate of return greater than the:
A. marginal cost of capital. B. cost of new debt capital. C. weighted average cost of capital.
Answer: A “Cost of Capital,” Yves Courtois, CFA, Gene C. Lai, and Pamela P. Peterson, CFA 2009 Modular Level I, Volume 4, pp. 41-43 Study Session 11-45-d Explain how the marginal cost of capital and the investment opportunity schedule are used to determine the optimal capital budget. The optimal capital budget is the amount of new capital required to undertake all investment projects with an IRR greater than the marginal cost of capital.
发表于 2009-6-30 15:51
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