If Alpha International Inc. has debt in its capital structure, it may forego a ________ project because too much of the increase in the firm's value may accrue to the creditors rather than the stockholders
A) negative NPV
B) zero NPV
C) positive NPV
D) negative rate of return
Answer: C
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Notes to the financial statements provide additional information about income tax expense and deferred tax assets and deferred tax liabilities. Firms report which of the following?
a. components of income before income taxes b. components of income tax expense c. reconciliation from statutory to effective tax rate d. components of deferred tax assets and liabilities e. all of the above
The balanced scorecard is a set of financial and nonfinancial measures that reflect the performance of the business
Indicate whether the statement is true or false
The ______ view of organizations suggests that environmental selection drives the evolution of corporate structures and that actions by managers have little effect.
A. institutional B. ecological C. natural selection D. adaptive
Dalrymple Inc. is considering production of a new product. In evaluating whether to go ahead with the project, which of the following items should NOT be explicitly considered when cash flows are estimated?
A. The company will produce the new product in a vacant building that was used to produce another product until last year. The building could be sold, leased to another company, or used in the future to produce another of the firm's products. B. The project will utilize some equipment the company currently owns but is not now using. A used equipment dealer has offered to buy the equipment. C. The company has spent and expensed for tax purposes $3 million on research related to the new product. These funds cannot be recovered, but the research may benefit other projects that might be proposed in the future. D. The new product will cut into sales of some of the firm's other products. E. If the project is accepted, the company must invest an additional $2 million in net operating working capital. However, all of these funds will be recovered at the end of the project's life.