Discuss the reasons companies make investments.
What will be an ideal response?
Companies make investments for several reasons. Three common reasons for investments are 1) to transfer excess cash into investments in order to earn more income; 2) to earn income from investments if the company is set up to manage mutual funds or pension funds; 3) for strategic reasons such as investments in competitors or suppliers.
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If a proposed investment's payback period is 3 years, its initial cost is $50,000, and its useful life is 10 years, which of the following must be true?
A) Cash inflows over the investment's useful life total $150,000. B) Cash inflows over the first three years total $50,000. C) The accounting profits generated by the investment over the first three years total $50,000. D) None of the above
Scalability refers to the ability of an application to operate on different devices or software platforms, such as different operating systems.
Answer the following statement true (T) or false (F)
Which statement(s) is/are true of PE ratios?
A. Managers, analysts, and investors expect companies with high PE ratios to experience future growth. B. Measures the amount that investors will pay for the firm's stock per dollar of equity used to finance the firm's assets. C. Measures how much investors are willing to pay for each dollar the firm earns per share of its stock. D. Both A and C are true.
When ? is unknown, it is more conservative to use z instead of t for the critical value.
Answer the following statement true (T) or false (F)