1. Good judgment comes from experience, and experience comes from bad judgment. I like this quote 1.Strongly Agree 2.Agree 3.Neutral 4.Disagree 5.Strongly Disagree

2. You expect a stock will be worth $110 a year from now Scenario 1: Required Return = 10%, value today = $100 Scenario 2: Required Return = 20%, value today = $91.67 What is the lesson from these scenarios? 1.As the discount rate goes up, the value of an asset or investment goes down. 2.As the discount rate goes up, the value of an asset or investment goes down. 3.None of the above

3. Depreciation Expense 1.Decreases cash flow because it is a cash expense 2.Decreases cash flow because it is a non-cash expense that decreases operating income which, in turn, decreases income taxes. 3.Increases cash flow because it is a non-cash expense that decreases operating income which, in turn, decreases income taxes. 4.None of the above

4. Capital Budgeting Project that costs $10,000, depreciated over 10 years— The annual cash outflow equals 1.$10,000 at time period 0 2.$1,000 per year 3.1 and 2 4.None of the above