When computing the cash flows for a capital project, which of the following is least likely to be included?
A. Financing costs
B. Opportunity costs
C. Tax effects
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In order to reduce a trade deficit, the government of a country experiencing full employment moves to depreciate its currency. As a result, if the countrys domestic spending declines relative to incom
A. Wealth effect.
B. Income effect.
C. Substitution effect.
Christina Ng, a Level I CFA candidate, defaulted on a bank loan she obtained to pay for her masters degree tuition when her wedding cost more than expected. A micro finance loan company lent her money
A. No
B. Yes,with regard to the first loan default
C. Yes,with regard to the second loan default
The Gordon growth model is most appropriate for valuing the common stock of a dividend paying company that is:
A. Experiencing growth that is higher than the sustainable growth rate.
B. Mature and relatively insensitive to economic fluctuations.
C. Young and just entering the growth phase.
A company that provides cruise ship vacations uses term loans to finance the acquisition of new cruise ships. Which of the following is most likely a negative covenant for the loans? The company must:
A. Seek lender approval to pay dividends.
B. Ensure the ships are insured.
C. Maintain a minimum level of working capital.