Shareholders in a Levered Firm Might Wish to Accept a Negative

question 70

Multiple Choice

Shareholders in a levered firm might wish to accept a negative net present value project if it:

• A)increases the standard deviation of the returns on the firm's assets.
• B)lowers the variance of the returns on the firm's assets.
• C)lowers the firm's volatility.
• D)diversifies the cash flows of the firm.
• E)decreases the risk that a firm will default on its debt.

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Definitions:

Human Resources Manager

A professional responsible for overseeing the administrative functions of an organization, including recruiting, hiring, and compliance.

Raise

typically denotes an increase in salary or wages given to an employee based on performance, tenure, or negotiation.

Training

The process of enhancing the skills, knowledge, and competencies of employees to perform specific jobs.

Equity Theory

An individual’s perception of fair and equitable treatment.