Project’s Cash Inflow Assignment

Which of the following is/are not a project’s cash inflow(s)? Ignore any tax effects.

I. equipment acquisition

II. decrease in inventory

III. product development cost

IV. decrease in accounts payable

V. product marketability studying cost

Multiple Choice

0 O I, III, IV and V only

0 I, II and III only

0 land Il only

0 O I Ill and only

0 Ill and V only

We can apply the the dividend growth model to estimate the cost of equity for

I. firms that pay no dividend

II. firms that pay a constant dividend

III. firms that pay dividend with a constant rate of increase

IV. firms that pay dividend with a constant rate of decrease

Multiple Choice

O II, III and IV only

ο O and Ill only

ο II and III only

ο O I, II and III only

ο O and Il only

Which of the following statements related to cash dividends is/are correct?

1. Extra cash dividends cannot be repeated by a firm.

II. A dividend will become a liability before it has been declared.

III. Regular cash dividends must be paid out of the proceeds of selling assets

IV. The dividend yield expresses the annual dividend as a percentage of current stock price.

V. If a firm has paid regular quarterly dividends for at least five consecutive years it is legally obligated to continue doing so.

III only

IV only

I, II and IV only

0 II, IV and V only

The information below are related to the proposed project of adding a new section of comic books at the City Hall Bookstore. The project’s time zero cash flow(s) include(s) Next

I. depreciation tax shield of $5,000

II. loan of $400,000 used to finance the project

III. cost of inventory replenish of $1,600 in the first year

IV. $64,000 of equipment needed to commence the project

V. wage of $45,000 paid to two newly hired workers for the project

Multiple Choice

O IV only

1,1,II, and IV only

o O I and II only and

l only o

o O I, II, and IV only

0 IV and V only. Get Finance homework help today