12.6.1 - Key Areas
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Practice Questions
Test your understanding with targeted questions
What is capital budgeting?
💡 Hint: Think about investments that last for years.
What does working capital management focus on?
💡 Hint: Consider cash flow and daily operations.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is the main focus of capital budgeting?
💡 Hint: Consider where a company places its large investments.
True or False: Financing decisions can only involve acquiring loans.
💡 Hint: Remember the balance between debt and equity.
2 more questions available
Challenge Problems
Push your limits with advanced challenges
A firm is considering investing in new technology that requires a capital expenditure of $500,000, expected to generate a return of $150,000 annually for five years. Determine the NPV if the discount rate is 10%.
💡 Hint: Remember the formula for calculating NPV and apply the discount factor.
Imagine a company that needs to decide between issuing bonds or stocks to raise $1 million. Discuss the potential advantages and disadvantages of both options and their impact on the company's long-term financial health.
💡 Hint: Consider long-term implications and immediate advantages of cash flow.
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