Financial Management - Study Mode

[#976] Capital budgeting is related to ________.
Correct Answer

(A) long terms assets

Explanation

Solution: Capital budgeting is related to long terms assets. Capital budgeting is the process a business undertakes to evaluate potential major projects or investments.

[#977] The expansion of CAPM is ____________.
Correct Answer

(B) Capital asset pricing model.

Explanation

Solution: The expansion of CAPM is Capital asset pricing model. The capital asset pricing model (CAPM) is used to calculate the required rate of return for any risky asset.

[#978] Working capital management is managing ____________.
Correct Answer

(A) short term assets and liabilities

Explanation

Solution: Working capital management is managing short term assets and liabilities. The goal of working capital management is to ensure that a company can afford its day-to-day operating expenses while, at the same time, investing the company's assets in the most productive way.

[#979] The company’s average cost of capital is ____________.
Correct Answer

(C) the average cost of shares and all sources of long-term funds

Explanation

Solution: The company’s average cost of capital is the average cost of shares and all sources of long-term funds. A long-term investment is an account on the asset side of a company's balance sheet that represents the company's investments, including stocks, bonds, real estate and cash. Long-term investments are assets that a company intends to hold for more than a year.

[#980] Value of future dividends after horizon date is classified as
Correct Answer

(D) Both B and C

Explanation

Solution: Value of future dividends after horizon date is classified as horizon value and terminal value.