[单项选择]With respect to the capital budgeting, which of the following occurs when an investment takes customers and sales away from another part of the company（）
A. Opportunity cost.
B. Externality.
C. Cannibalization.

[单项选择]With respect to a capital budgeting analysis, which of the following is most likely included in the computation of a project's cash flow（）
A. Sunk costs.
B. Financing costs.
C. Opportunity costs.

[单项选择]With respect to capital project, if the discount rate decrease, which of the following about the internal rate of return (IRR) and net present value (NPV) are most accurate（）
A. Both IRR and NPV increase.
B. IRR remains unchanged and NPV increases.
C. Both IRR and NPV remain unchanged.

[单项选择]An analyst does research about capital budgeting and gathers the following information about two independent projects:

	NPV	IRR
Project 1	$121200	16.7%
Project 2	$919790	13.6%

If there is no capital rationing and the company's cost of capital is 10.5%, the company should invest in:（）
A. Project 1.
B. Project 2.
C. both Project 1 and Project 2.

[单项选择]Capital budgeting process is the process of identifying and evaluating capital budgeting with four administrative steps. The most important step in the capital budgeting process is:（）
A. forecasting cash flows.
B. generating good investment ideas.
C. analyzing individual proposals.

[单项选择]An analyst does capital budgeting about two independent projects.

Project	Net Present Value	Internal Rate of Return
1	$150	18%
2	$200	15%

If the investor's required rate of return is 12%, which project should most likely be accepted（）
A. Project 1.
B. Project 2.
C. Projectl and Project 2.

[单项选择]An analyst does research about capital budgeting. A company that has a weighted average cost of capital of 17 percent is considering an independent capital project that has the same risk as the company, an estimated internal rate of return of 19 percent and cash inflows that are expected at equal intervals over the life of the project. If the project is accepted, cash flows associated with the project are received as expected, and the company's weighted average cost of capital remains unchanged over the life of the project, the actual rate of return earned by the project is most likely to be:（）
A. less than 19%.
B. more than 19%.
C. equal to 19%, because the actual cash flows equal the expected cash flows.

[单项选择]With respect to corporate governance, which of the following is most likely eligible to serve on the board:（）
A. independent board members.
B. independent nonexecutive board members.
C. executive board members.

[单项选择]With respect to accounting equations, which of the following is least accurate
A. Ending retained earnings=Beginning retained eamings+Net income-Dividends.
B. Ending retained earnings=Beginning retained earnings+RevenuesExpenses-Dividends.
C. Assets=Liabilities-Contributed capital+Beginning retained earnings+ Revenues-Expenses-Dividends.

[单项选择]With respect to liquidity management, which of the following is most likely a primary source of liquidity（）
A. Trade credit from vendors.
B. Renegotiating debt contracts.
C. Filing for bankruptcy protection and reorganization.

[单项选择]The author is most probably addressing which of the following audiences


A. Medical students in a course on human anatomy.
B. College students in an introductory course on archaeology.
C. Psychologists investigating the uses of human immaturity.
D. Biologists trying to trace the course of human evolution.

[单项选择]Which is the capital city of Australia
A. Canberra.
B. Melbourne.
C. Sydney.
D. Perth.

[单项选择]Which is the capital city of Wales
A. Swansea.
B. Liverpool.
C. Cardiff.
D. Birmingham.

[单项选择]With respect to the underlying asset, which of the following derivatives provides the lea.st information about price volatility（）
A. Call.
B. Put.
C. C. FR

[单项选择](Virtually) no disease exists today (for which) there is no drug that can be given, (neither)to cure the disease or to alleviate (its) symptoms.
A. Virtually
B. for which
C. neither
D. its

[单项选择]Which of the following statements about capital budgeting is TRUE（　）
A. Since capital budgeting is based on cash flows rather than net accounting income, changes in noncash balance sheet accounts such as inventory are not relevant to the analysis.
B. If an investment project would make use of property that the firm currently owns, the project should not be charged with the opportunity cost (rental income) of the property.
C. Any cash flow that can be classified as incremental is relevant in a capital budgeting project analysis.