Prada has ten million shares outstanding, generates free cash flows of $ 60 million each year and has a cost of capital of 10%. It also has $40 million of cash on hand
Prada wants to decide whether to repurchase stock or invest the cash in a project that generates free cash flows of $2 million each year. Should Prada invest or repurchase the shares?
A) indifferent between options
B) repurchase
C) invest
D) cannot say for sure
Answer: B
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A section in a contract that ensures that providers of goods and services do not encounter unreasonable financial hardship as a result of uncontrollable increases in the costs of or decreases in the availability of something required to deliver products to customers is called a(n) ________ clause.
Fill in the blank(s) with the appropriate word(s).
The U.S. antitrust law distinguishes between actions that are: A) per se wrong and actions to which the role of reason applies
B) marginally wrong and actions to which the rule of reason applies. C) partially wrong and actions to which the rule of best judgment applies. D) good and bad.
Distinguish between suppliers and media.
What will be an ideal response?
On January 31, your company prepays rent of $13,250 for February and March. Which of the following describes the effects of this transaction on your company's accounting equation?
A. Liabilities decrease $13,250 and stockholders' equity increases $13,250. B. Assets increase $13,250 and stockholders' equity increases $13,250. C. Assets decrease $13,250 and liabilities decrease $13,250. D. There is no change to total assets, liabilities or stockholders' equity.