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With a decrease in time preference, the supply of loanable funds will increase.
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- How will a decrease in time preferences affect the loanable funds market? A. There will be an increase in the supply of loanable funds. B. There will be a decrease in the supply of loanable funds. C. There will be an increase in the demand of loanable funds. D. There will be a decrease in the demand of loanable funds.Is the incremental cost of borrowing additional funds affected significantly by the early repayment of the loan?What is meant by the incremental cost of borrowing additional funds?
- Which of the following is not a capital budgeting technique? Select one: a. Net present value b. Discounted Payback period c. Payback Period d. Profitability index e. Ratio Analysis Which capital budgeting projects are preferred? Select one: a. Lower payback period b. None of the option c. Higher payback period d. Lower cash inflow projects e. Average payback periodAn advantage of the internal rate of return method is that a.it considers the time value of money. b.it can rank proposals of equal lives. c.it considers the cash flows of the investment. d.All of these choices are correct.When using the NPV method for a particular investment decision, if the present value of all cash Inflows Is greater than the present value of all cash outflows, then _______ . A. the discount rate used was too high B. the investment provides an actual rate of return greater than the discount rate C. the investment provides an actual rate of return equal to the discount rate D. the discount rate is too low
- What is the most commonly used capital budgeting procedures? Select one: a. IRR b. Payback period c. Discounted Payback period d. NPV e. Profitability IndexQuestion With the ad of a diagram for the loanable funds market, briefly discuss the crowding-out afted of an incingement spending financed by swing beds (YOU DO NOT HAVE TO DRAW THE DIAGRAM BECAUSE IT IS NOT EASY TO DRAW ONWhen evaluating projects using internal rate of return,? A. projects having lower early-year cash flows tend to be preferred at higher discount rates. B. projects having higher early-year cash flows tend to be preferred at higher discount rates. C. projects having higher early-year cash flows tend to be preferred at lower discount rates. D. the discount rate and magnitude of cash flows do not affect internal rate of return.
- When we use the AFN equation to forecast the additional funds needed (AFN), we are implicitly assuming that all financial ratios are constant. A. True B. FalseComparing the estimated net present values or internal rates of return for an investment using several different values for one or more key variables is called Multiple Choice capital budgeting. discounting. sensitivity analysis. compounding.An investment is a current commitment of money for a period of time, in order to derive future payments that will compensate for, the time the funds are committed, expected rate of inflation and uncertainty of future flow of funds Select one: True False