Exam 4
Question 1 (1.5 points) 
Uncertainty is present when: 

Question 2 (1.5 points) 
The crossover discount rate only equates the: 

Question 3 (1.5 points) 
The SarbanesOxley Act does not significantly tighten accountability standards for: 

Question 4 (1.5 points) 
Expenditures necessary to overcome ownermanager conflicts are called: 

Question 5 (1.5 points) 
For two projects of differing sizes, the project that is less risky has the: 

Question 6 (1.5 points) 
The emergence of the virtual corporation can be explained by the: 

Question 7 (1.5 points) 
Net present value is the: 

Question 8 (1.5 points) 
The reservation wage includes a return to: 

Question 9 (1.5 points) 
Acceptance of investment projects where IRR > MCC: 

Question 10 (1.5 points) 
Capital budgeting is the process of planning investment expenditures when returns are expected to: 

Question 11 (1.5 points) 
Ownership value derived from the ability to control the type of output produced gives rise to high: 

Question 12 (1.5 points) 
The maximin criterion involves: 

Question 13 (1.5 points) 
When NPV is positive, the IRR: 

Question 14 (1.5 points) 
Economic risk is the: 

Question 15 (1.5 points) 
If the tax rate is 25% and the prevailing interest rate is 12%, the after tax cost of debt is: 

Question 16 (1.5 points) 
A "flat" organization design reflects a(n): 

Question 17 (1.5 points) 
Union organizing expenses are a type of: 

Question 18 (1.5 points) 
A valuation model that explicitly accounts for risk can be written as: 

Question 19 (1.5 points) 
The riskfree rate of return is the investor reward for: 

Question 20 (1.5 points) 
High inside ownership at Microsoft reflects the company's: 

Question 21 (1.5 points) 
When net present value is positive: 

Question 22 (1.5 points) 
Firms should finance a project if its: 

Question 23 (1.5 points) 
The qualitycontrol potential of hightech firms tends to result in: 

Question 24 (1.5 points) 
The internal rate of return can be calculated by solving for ki after setting net present value equal to: 

Question 25 (1.5 points) 
To justify an investment that involves an outofpocket cost of $100 and a 50/50 chance of payoffs of $0 or $250, the decision maker must have personal certainty equivalent adjustment factor that is: 

Question 26 (1.5 points) 
The relationship between McDonalds and CocaCola is: 

Question 27 (1.5 points) 
The inefficient preference for stable performance is called the: 

The natural conflict between owners and managers is called the: 
