Which of the following statements is CORRECT? Assume that the project being considered has normal cash flows, with one outflow followed by a series of inflows.
A. A project's NPV is generally found by compounding the cash inflows at the WACC to find the terminal value (TV), then discounting the TV at the IRR to find its PV.
B. The higher the WACC used to calculate the NPV, the lower the calculated NPV will be.
C. If a project's NPV is greater than zero, then its IRR must be less than the WACC.
D. If a project's NPV is greater than zero, then its IRR must be less than zero.
E. The NPVs of relatively risky projects should be found using relatively low WACCs.
Answer: B
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Tony's gross pay for the month is $2700. Tony's deduction for federal income tax is based on a rate of 21%. Tom has no voluntary deductions. Tony's year-to-date pay is under the limit for OASDI. What is the amount of FICA tax withheld from Tony's pay? (Assume a FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%. Do not round any intermediate calculations, and round your final answer to the nearest cent.)
A) $773.55 B) $206.55 C) $567.00 D) $387.45
Which of the following would create a permanent difference between published statements and tax returns?
a. Municipal bond interest income b. Deductible charitable contributions c. MACRS depreciation d. Bad debt expense
If demand is unstable, as it often is in the introductory and growth stages of the product life cycle, it might be best for a firm to use a
A. pull strategy. B. push strategy. C. demand strategy. D. supply strategy. E. forecast strategy.
"We have 125 qualified candidates for the quarterly training program but only 25 slots," said Bill Robbins, production manager. "In that case, randomly select 25, and we will train the other candidates later this year during the next rounds of training," said Jill Stern, division manager. By selecting the first 25 qualified candidates at random rather than examining each candidate's file to determine if more qualified candidates should be selected first, the managers are engaging in
A. optimizing. B. satisficing. C. ignoring. D. favoring. E. maximizing.