Question: solve as many as possible please, thanks! 4. A project's operating cash flow will increase when: a. the depreciation expense increases. b. the sales projections

4. A project's operating cash flow will increase when: a. the depreciation expense increases. b. the sales projections are lowered. c. the interest expense is lowered d. the net working capital requirement increases. e. the earnings before interest and taxes decereases. 5. Assume there are no corporate or personal taxes. Aecording to M\&M Proposition: A) I, the total value of the firm depends on how cash flows are divided up between stockholders and bondholders. B) I, a firm's capital strueture is relevant, C) II, the cost of equity rises as the firm increases its use of debt financing D) II, the cost of equity depends on the firm's business risk but not its financial risk. E) I and II, as debt increases, the increase in the cost of equity is more than offset by the lower cost of debt and the WACC falls. 6. Finance is most fundamentally concerned with a. Money creation by banks b. The economics of time and risk c. Commodities d. The stock market e. None of the above 7. Which of the following are correct methods for computing the operating cash flow of a project assuming that the interest expense is equal to zero? I. EBIT+Depr--Taxes II. EBIT+Depr, Taxes 111. NI+Depr. IV. (Sales- Costs) ( Taxes + Depr.) (1T) a. I and 111 only b. II and IV only c. II and III only d. I, III, IV only c.) II, III, IV only 8. If you were to argue that the firm's stock price decreases as the dividend payout decreases, you would be making an argument with MM's dividend irrelevance theory, and the-hand" theory. a. consistent; consistent b. inconsistent; consistent c. consistent ; inconsistent d. inconsistent; inconsistent e. the argument above does not make sense; neither theory discusses the stock price
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
