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Corporate Finance Sample Problems for midterm (conceptual problems) Ch1 36.?(p.?11)?The financial goal of a corporation is to:?a.?Maximize profitsb.?Maximize salesC.?Maximize the value of the firm for the shareholdersd.?Maximize managers benefits ? Ch2 4.?(p.?15)?The rate of return is also called: I) discount rate; II) hurdle rate; III) opportunity cost of capital?a.?I onlyb.?I and II onlyC.?I,II, and IIId.?None of the given ones ?22.?(p.?17)?Which of the following statements regarding the net present value rule and the rate of return rule is not true??A.?Accept a project if NPV cost of investmentb.?Accept a project if NPV is positivec.?Accept a project if return on investment exceeds the rate of return on an equivalent investment in the financial marketd.?Reject a project if NPV is negative 26.?(p.?18)?The opportunity cost of capital for a risky project is?a.?The expected rate of return on a government security having the same maturity as the projectb.?The expected rate of return on a well-diversified portfolio of common stocksC.?The expected rate of return on a portfolio of securities of similar risks as the projectd.?None of the above 36.?(p.?22)?The discount rate is used for calculating the NPV is:?A.?Determined by the financial marketsb.?Found by the governmentc.?Found by the CEOd.?None of the above ?37.?(p.?23)?The managers of a firm can maximize stockholder wealth by:?A.?Taking all projects with positive NPVsb.?Taking all projects with NPVs greater than the cost of investmentc.?Taking all projects with NPVs greater than present value of cash flowd.?All of the above ?39.?(p.?24)?Managers actions are monitored by:?a.?The board of directorsb.?Commercial banks that have loaned funds to the firmc.?The Wall Street analystsD.?All of the above 13.?(p.?38)?Which of the following is generally considered an example of a perpetuity:?a.?Interest payments on a 10-year bondb.?Interest payments on a 30-year bondC.?Consolsd.?None of the