Question

Question 7 (1 point) Calculate the net debt of a firm with a market capitalization (market value of equity) of $65 Billion, market value of debt of $10 Billion, and $4 Billion in cash and equivalents. [Note: Enter your answer in Billions; for example, if you calculate the net debt to be $10 Billion, then enter just 10 in the answer box. Your Answer Answer Question 8 (1 point) In which one of the following situations would the payback method be the preferred method of analysis? 1) A project that can easily be expanded 2) Two mutually exclusive projects 3) A proposed expansion of a firm's current operations 4) Different-sized projects

Answer 1

A B C D E F G H I 4 q7 Net debt - Market value of debt less cash and cash equivalent 10 Debt Cash Net debt 11 98 12 Two mutually exclusive project As the project with lesser payback period would be beneficial as company can choose only one project 13 14 15

в 1 4 7 Net debt = Market value of debt less cash and cash equivalent Debt Cash Net debt =C6-C7 10 11 98 Two mutually exclusive project 12 As the project with lesser payback period would be beneficial as company can choose only one project