A Preference Decision in Capital Budgeting

question 163

Multiple Choice

A preference decision in capital budgeting:

• A) is concerned with whether a project clears the minimum required rate of return hurdle.
• B) comes before the screening decision.
• C) is concerned with determining which of several acceptable alternatives is best.
• D) involves using market research to determine customers' preferences.

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Definitions:

Stock Split

A corporate action that increases the number of a corporation's outstanding shares by dividing each share, which in turn reduces its price but not the total market capitalization.

Total Market Value

The aggregate value of a company or an asset in the marketplace, based on current prices and the total number of shares or units outstanding.

Stock Split

A corporate action where a company divides its existing stock into multiple shares to boost the liquidity of the shares.

Shares Outstanding

The cumulative amount of a company's shares that have been approved, distributed, and acquired by shareholders and currently possessed by them.