Question: The decision to develop undeveloped resources resembles a call option, where the strike price in this valuation model is: a. The exploration cost b. The
The decision to develop undeveloped resources resembles a call option, where the strike price in this valuation model is:
| a. | The exploration cost | |
| b. | The initial cost of developing the resources | |
| c. | Estimated value of resources | |
| d. | Payoff on investment | |
| e. | none of the above |
If Sales were $8,000,000 and $9,000,000 in 2019 and 2020 respectively, ATO was 4 and 2 in 2019 and 2020 respectively, NFOs were $400,000 and $500,000 in 2019 and 2020 respectively, what was the change in CSE from 2019 to 2020?
| a. | $2,500,000 | |
| b. | $100,000 | |
| c. | $900,000 | |
| d. | $2,400,000 | |
| e. | none of the above |
If the interest on notes payable is higher than the market interest rate, the firm should treat them as:
| a. | Operating assets | |
| b. | Financial assets | |
| c. | Operating liabilities | |
| d. | Financial liabilities | |
| e. | none of the above |
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