Practice Financial Decision-Making in Organizations - 12.6 | 12. Decision-Making in Organizations | Management 1 (Organizational Behaviour/Finance & Accounting)
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12.6 - Financial Decision-Making in Organizations

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Learning

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What is capital budgeting?

💡 Hint: It involves planning for future financial projects.

Question 2

Easy

What do financing decisions involve?

💡 Hint: Think about how companies raise money.

Practice 4 more questions and get performance evaluation

Interactive Quizzes

Engage in quick quizzes to reinforce what you've learned and check your comprehension.

Question 1

What does NPV stand for?

  • Net Positive Value
  • Net Present Value
  • Net Profit Value

💡 Hint: It relates to present value calculations.

Question 2

True or False: Working capital management focuses only on long-term investments.

  • True
  • False

💡 Hint: Short term vs. long term.

Solve 2 more questions and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

A startup is considering two projects: Project A which costs $50,000 has projected inflows of $10,000 for the first three years and $30,000 in year four. Project B costs $60,000 with inflows of $20,000 for the first three years and $10,000 in year four. If the discount rate is 8%, which project should they invest in?

💡 Hint: Use the formula NPV = ∑ Cash inflows / (1+r)^t and compare results.

Question 2

A company must decide to pay a dividend of $5 per share or retain the profits for expansion. The expected return on reinvestment is 15%. If the company has 10,000 shares, calculate the potential benefit of reinvesting over one year versus paying the dividend.

💡 Hint: Consider long-term growth versus immediate payouts.

Challenge and get performance evaluation