The three forms of the efficient markets hypothesis are:
a. Weak, semistrong, strong.
b. Slow, quick, instantaneous.
c. Past, current, future.
d. Private, semipublic, public.
ANSWER: A
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Which of the following statements is true about the current consumers in the United States?
a. They emphasize price more than product quality. b. They seldom register brand names. c. They give importance to durability of products. d. They tend to choose products that are expensive.
Under a conservative funding strategy, the firm funds both its seasonal and its permanent requirements with long-term debt
Indicate whether the statement is true or false
Which of the following statements is true regarding the acquisition method of accounting for a business combination?
A. Net assets of the acquired company are reported at their fair values. B. The acquisition can only be effected by a mutual exchange of voting common stock. C. Net assets of the acquired company are reported at their book values. D. Any goodwill associated with the acquisition is reported as a development cost. E. Indirect costs of the combination reduce additional paid-in capital.
Major Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $100,000. The equipment will have an initial cost of $500,000 and have an 8-year life. The equipment has no salvage value. The hurdle rate is 8%. Ignore income taxes. Answer the following:a. What is the net present value?b. What would the net present value be with a 12% hurdle rate?c. Based on the NPV calculations, in what range would the equipment's internal rate of return fall?
What will be an ideal response?