the following information relates to an investment project which is being evaluated by the directors of fence co, a listed company. the initial investment, payable at the start of the first year of operation, is $3.9 million. the directors believe that this investment project will increase shareholder wealth if it achieves a return on investment greater than 15%. based on the average investment method, what is the return on investment of the investment project?
which of following is an operating expense?
a qualitative evaluation of a proposal undertaken can be:
which of the following is not financial methods of project appraisal？
capital expenses are recorded as expenses on the income statement rather than as assets on a company's balance sheet.
capital budgeting is the process of identifying, ysing and selecting investment opportunities in non current assets whose returns are expected to extend within one year.
depreciation is not a cash flow item, and to work out the actual cash flow depreciation has to be added back to the accounting profit.
a legally binding contract cost that is the subject of payment in 3 years to mooc co. .this is a relevant cost.
if an employee will be paid his basic wage of $200 per week for attending work and doing nothing, this is a relevant cost.
costs of commissioning a market research survey in a previous accounting period are non-relevant costs.
working capital will be released again at the end of a project's life，it is a cash inflow at the end of a project's life.
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which of the following statements is true? i the australian securities exchange is a money market. ii money markets are markets for short-term capital. iii companies cannot be involved in money market operations.
the asx can reasonably be described as
which of the following is not an aim of regulating the financial markets?
which of the following types of investment carries the highest level of risk?
which of the following sources of equity finance is a company most likely to use in practice?
which of the following is least likely to be a reason for seeking a stock market flotation?
which of the following is not true of a rights issue by a listed company?
what is the term for an arrangement whereby a listed company issues new shares which are bought by a all number of institutional investors, such as pension funds and insurance companies?
eurocurrency is currency which is held by iniduals and institutions outside europe.
when a business has been set up by someone who has already put time and money into getting it started, a vc may be willing to provide finance to enable it to get off the ground.
lepus has issued loan notes of $100 nominal value with annual interest of 9% per year, based on the nominal value. the current market price of the loan notes is $90. what is the cost of the loan notes?
haha is financed partly by equity and partly by debentures. the equity proportion is always kept at one thirds of the total. the cost of equity is 16% and that of debt 10%. ignore taxation. calculate the weighted average cost of capital for the entity.
the weighted average cost of capital can be used in investment appraisal if the existing capital structure will be maintained （same financial risk）.