Finance

Which of the following best describes the financial loss involved in choosing a less profitable option?
Terminal Loss
Opportunity Cost
Marginal Cost
Which of the following is considered a relevant cost when undertaking an investment analysis?
Opportunity Cost
Sunk cost
Standard Costs
An investment decision can also be assessed on the basis of the Triple Bottom Line accounting. In this methodology managers
Are responsible for accounting results, cash flow performance and balance sheet impact
Assess a project on the basis of what is referred to as People, Plant and Profit impact
Determine the profit potential utilizing zero cost of capital, weighted average cost of capital and real cost of capital
A large cable television provider is considering getting in to the high end ice cream business. Which of the following questions is most relevant to evaluating this proposal?
How long will the project last and what are its key stages?
How much financing is required and what is the cash flow pattern?
Does the project align with the overall objectives of the company?
What is an advantage of the payback method?
It considers the hurdle rate.
It considers all relevant cash flows.
It considers the wealth of shareholders of the business.
It is quick and easy to calculate.
Stage 2 of the Investment Decision Making Process would include adopting a systematic approach
True
False
Stage 3 of the Investment Decision Making Process would include converting promising ideas into full blown proposals
True
False
The Process of Investment Decision Making includes only these steps: Stage 1: Determine Investment Funds Available Stage 2: Approve the Project(s) Stage 3: Monitor and Controlthe Project(s)
True
False
Diversifiable Risk could be described as Avoidable Risk
True
False
Non-Diversifiable Risk can be affected by the rate of inflation, interest rates and exchange rates.
True
False
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