Principles of Corporate Finance
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Questions and Answers

What is the guiding logic of all corporate finance?

  • Corporate umbrella insulates the eventual owners from personal risk
  • All projects must be self-liquidating (correct)
  • New investments should be made by well-managed enterprises
  • New capital should be financed in ways that create new owners

What is the expected payback period for new equipment in the corporate sector?

  • Within six to eight years
  • Within one to two years
  • Within ten to twelve years
  • Within three to five years (correct)

How much new productive assets are added annually to the U.S. economy?

  • Over $1 trillion
  • Over $10 trillion
  • Over $2 trillion (correct)
  • Over $5 trillion

What is the purpose of Capital Homesteading?

<p>To democratize access to future capital ownership and profits (A)</p> Signup and view all the answers

What does the Center for Economic and Social Justice call the process of Capital Homesteading?

<p>Counter-inflationary process (D)</p> Signup and view all the answers

What would Capital Homesteading provide to all citizens?

<p>Self-liquidating capital credit (D)</p> Signup and view all the answers

What is the purpose of extending binary corporate finance throughout the economy?

<p>To break the monopoly of capital ownership (B)</p> Signup and view all the answers

What is the definition of 'pure credit'?

<p>Credit independent of past savings (C)</p> Signup and view all the answers

What would be the result of limiting the extension of 'pure credit' by the central bank to current non-owners?

<p>Noninflationary expansion of the ownership of capital assets (C)</p> Signup and view all the answers

What would be the effect of distributing capital incomes broadly within a nation of owners?

<p>Reduction in prices (B)</p> Signup and view all the answers

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