When All Future Cash Inflows and Outflows Are Discounted to the Present

question 167

Multiple Choice

When all future cash inflows and outflows are discounted to the present using the required rate of return, the method used is

• A)capital budgeting.
• B)discounted cash flow.
• C)net present value.
• D)required rate of return.
• E)payback method.

Analyze how capital structure affects a firm’s cost of capital.

Comprehend the effect of taxes on cost of capital components.

Understand the relevance of target and existing capital structure in raising capital.

Learn the significance of economic value added (EVA) in financial decision making.

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