Matching Contributions by Employers Are More Common with 403(b) and 457

question 1

True/False

Matching contributions by employers are more common with 403(b) and 457 plans than with 401(k) plans.

Identify various methods for incorporating risk into capital budgeting, including Monte Carlo simulation.

Understand the implications of project risk on a firm's financial health and risk profile.

Recognize the value and types of real options in capital budgeting.

Understand how risk in cash flow estimation affects capital budgeting decisions.

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Definitions:

Perfect Competition

A market structure characterized by many buyers and sellers, identical products, and no barriers to entry or exit.

Zero Economic Profits

A situation in perfect competition where firms earn just enough revenue to cover all their costs, including opportunity costs, indicating no supernormal profit above the normal rate of return.

Long-Run Equilibriums

A state in which all factors of production and market forces are balanced and economic variables are not expected to change.

Implicit And Explicit Costs

Implicit costs are the opportunity costs of using resources that a firm already owns, while explicit costs are direct payment outflows for purchasing productive resources.