Comparable ratios are the only way to measure horizon value. True FalseEnterprise value measures the net cost of acquiring the debt True FalseTBS’s working capital policy is to have a large investment in current assets and to use a small amount of short-term debt. As a result part of their temporary current assets are financed with long-term debt. TBS has a (an) ______ working capital policy.A.ConservativeB.AggressiveC.Moderate (matching)Tali is considering a new project. The project will generate revenues of $16 million and operating costs of $9 000 000 annually for the next 5 years. Interest expense is $1 000 000 per year. It requires an additional machine that costs $15 million dollars and will be fully depreciated (to a zero book value) on a straight?line basis over 5 years. The machine has a salvage value of $2 000 000. Tali’s tax rate is 30%. The beta of the project is 1.10. The risk-free return is 5% and the return on the market is 15%. What is the net present value of the project?A.2 317 039B.4 657 461C.2 365 456D.4 943 129E.2 651 124Which of the following is an advantage of comparable measures?A.It is easy to incorporate firm-specific informationB.It incorporates what you can do with the assetC.It relies on comparable accounting measuresD.It contains market information on the valueWith the weighted average cost of capital the impact of interest expense is picked up inA.The cash flowsB.An adjustment at the endC.The discount rateWhich method values equity instead of the entire firm?A.Adjusted present valueB.Weighted average cost of capitalC.Flow to equity
