quiz

Question 1
2 / 2 pts
What is a capital investment?
What is a capital investment? using money to buy goods or services

issuing shares of stock of the corporation

authorizing and issuing shares of common stock by a multinational corporation

committing resources to projects that have costs and benefits well into the future Correct! Question 2
2 / 2 pts
Estimating the expected cash inflows and outflows from proposed projects is performed in what step of the capital budgeting process?
Estimating the expected cash inflows and outflows from proposed projects is performed in what step of the capital budgeting process?

project identification

project evaluation Correct! project monitoring

project review

Question 3
2 / 2 pts
Which capital budgeting technique is preferred in all major industrialized countries?
Which capital budgeting technique is preferred in all major industrialized countries? net present value

internal rate of return

payback period

none of the above Correct! Question 4
2 / 2 pts
Why is it believed that Japanese companies prefer the payback period over the discounted cash flow methods for evaluating capital investment alternatives?
Why is it believed that Japanese companies prefer the payback period over the discounted cash flow methods for evaluating capital investment alternatives? It is consistent with their corporate strategy of investing in new technology.

Japanese companies compete using very short product life cycles.

Cash flows over a long period of time are difficult to predict with much accuracy.

All of the above Correct! Question 5
2 / 2 pts
Why is the multinational capital budgeting process more complex than capital budgeting in a domestic environment?
Why is the multinational capital budgeting process more complex than capital budgeting in a domestic environment?