The view that shareholders should be considered the primary stakeholders of the corporation is dominant in the United States.
Select one:
True
False
Wang & Liu Construction Equipment, Inc. is considering an expansion to its main production facility. The firm’s financial analysts have already prepared estimates of the firm’s incremental operating cash flows and have partially completed the following spreadsheet.
The project requires a $5,400 investment in new fixed assets which is expected to result in a net after-tax disposal cash flow of $460 at the end of the project. An investment in net working capital of $260 is also required, but this investment is expected to be recaptured in the last year of the project. The firm’s WACC = 9%. What is the NPV of the project?
| Year | 0 | 1 | 2 | 3 | 4 |
|---|---|---|---|---|---|
| I. Incremental Operating Cash Flows | 2,200 | 2,500 | 2,800 | 3,400 | |
| II. Change in Net Working Capital | |||||
| III. Capital Spending |
Select one:
a.
$ 2,680.00
b.
$ 3,343.37
c.
$ 3,462.12
d.
$ 2,833.31
e.
$ 3,543.37
In the context of capital budgeting analysis, sunk costs are the cash flows forgone by using an asset.
Select one:
True
False
Which of the following is a defense against hostile corporate takeovers which involves buying out the hostile bidder?
a.
Shareholder Target Rights
b.
Blue Tornado Defense
c.
Green Mail
d.
Crown Jewels Defense
e.
Poison Purchase
Corporate governanceis the term used in the textbook to describe the manner in which a country’s regulatory authorities choose to constraint the operations of commercial enterprise in order to achieve politically derived social objectives.
Select one:
True
False
