Which of the following capital budgeting techniques does not routinely rely on the assumption that all cash flows occur at the end of the period?
a. internal rate of return
b. net present value
c. profitability index
d. payback period
D
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According to the free cash flow hypothesis that has been proposed to explain how dividend policies affect stock prices, cash flows that cannot be reinvested in positive net present value projects should be retained and reinvested by the firm.
Answer the following statement true (T) or false (F)
Ida has been tasked with formulating the business strategy for Contour Cosmetics' new line of lipsticks. Which of the following ideas would Ida be likely to include in her proposal?
A. Promote the lipsticks as the longest-lasting on the market. B. Open kiosks in shopping centers located in developing countries with rising disposable incomes. C. Reorganize the manufacturing division to gain efficiency. D. Invest in building an online store for Contour products.
If a firm uses an aggressive financing strategy, ________
A) it increases return and increases risk B) it increases return and decreases risk C) it decreases return and increases risk D) it decreases return and decreases risk
What are the three basic methods of dealing with risk in the risk management process?
What will be an ideal response?