SEVEN:

The ratio which many observers use to quantify the stock market's opinion of a firm is the:

aROE

bEPS

c.D/E

d.P/E

e.None of the above

Present Value Calculations:

a.can help the creation of value

b.can provide managers with a means of identifying the best investment choices

c.do not help in the creation of value

d.a and b

e.b and c

Flexibility issues are those which:

a.deal with a companys financing reserves

b.impact the debt capacity that a firm should maintain

c.all of the above

A discount factor:

a.is the same as compounding future cash flows

b.performs the reverse function of a compounding interest rate

c.allows investors to quantify a figure which will assist them in comparing alternative investments

d.b and c

e.a,b and c

Which of the following methods results in a net present value of zero?

a.IRR

b.Payback

c.Discount payback

d.None of the above