Fundamentals of Corporate Finance Overview Exam Questions and Correct Answers Latest Update
2024 (100% Pass)
Capital Budgeting - Answers Choosing projects that add value to a company.
Cost Centers - Answers Departments that do not generate revenue.
Long-term Financial Plan - Answers Budgeting for significant future financial outlays.
Reforecasting - Answers Updating budget estimates as projects progress.
Accountability - Answers Responsibility for financial performance and decisions.
Measurability - Answers Ability to assess investment effectiveness quantitatively.
Mutually Exclusive Decisions - Answers Choices where selecting one excludes others.
Discounted Cash Flow Analysis - Answers Evaluating cash flows adjusted for time value.
Initial Cash Outlay - Answers One-time expense for starting a project.
Payback Analysis - Answers Timing of when investment costs are recovered.
Break Even - Answers Point where total revenue equals total costs.
Throughput Analysis - Answers Evaluating overall revenue minus variable costs.
Fixed Costs - Answers Expenses that do not change with production volume.
Payback Period - Answers Time needed to recover initial investment.
Liquidity Concerns - Answers Issues related to cash availability for operations.
Time Value of Money - Answers Concept that money today is worth more than tomorrow.
Discounted Payback Period - Answers Payback period adjusted for time value of money.
Internal Rate of Return (IRR) - Answers Discount rate making net present value zero.
Net Present Value (NPV) - Answers Difference between present value of cash inflows and outflows.
Capital Budgeting Methods - Answers Various techniques for evaluating investment projects.
Project Selection - Answers Choosing projects based on profitability metrics.
Operational Budgeting - Answers Budgeting focused on day-to-day operations.
Financial Leadership - Answers Guidance in financial planning and budgeting.
Cash Flow Forecasts - Answers Predictions of future cash inflows and outflows.
, Project Risks - Answers Potential uncertainties affecting project outcomes.
Investment Decisions - Answers Choices regarding allocation of financial resources.
Capital Allocation - Answers Distribution of financial resources among projects.
Revenue Analysis - Answers Examination of income generated from operations.
Salvage Value - Answers Estimated resale value at project end.
Liquidity - Answers Availability of cash to meet obligations.
Cost of Capital - Answers Minimum return needed for investment justification.
Weighted Average Cost of Capital (WACC) - Answers Average rate of return on all capital sources.
IRR Rule - Answers Accept project if IRR exceeds cost of capital.
Mutually Exclusive Projects - Answers Projects where only one can be accepted.
Unconventional Cash Flows - Answers Cash flows with additional outflows after investment.
Profitability Index (PI) - Answers Ratio of present value to initial investment.
Incremental Budgeting - Answers Budgeting based on previous year's expenses.
Activity-Based Budgeting - Answers Budgeting based on activities driving costs.
Zero-Based Budgeting - Answers Budgeting starts from a zero base.
Operational Budget - Answers Short-term budget for day-to-day operations.
Capital Budget - Answers Long-term financial plan for investments.
Sensitivity Analysis - Answers Assessment of how changes affect NPV.
Project Hurdle Rate - Answers Minimum acceptable return for a project.
Financial Calculator - Answers Tool for computing financial metrics like IRR.
Management Decision Making - Answers Strategic planning based on financial analysis.
Cash Flow Streams - Answers Inflow and outflow of cash over time.
Long-Term Investments - Answers Investments expected to generate returns over years.
Capital Outlays - Answers Funds used for acquiring or maintaining assets.
Discount Rate - Answers Rate used to discount future cash flows.
2024 (100% Pass)
Capital Budgeting - Answers Choosing projects that add value to a company.
Cost Centers - Answers Departments that do not generate revenue.
Long-term Financial Plan - Answers Budgeting for significant future financial outlays.
Reforecasting - Answers Updating budget estimates as projects progress.
Accountability - Answers Responsibility for financial performance and decisions.
Measurability - Answers Ability to assess investment effectiveness quantitatively.
Mutually Exclusive Decisions - Answers Choices where selecting one excludes others.
Discounted Cash Flow Analysis - Answers Evaluating cash flows adjusted for time value.
Initial Cash Outlay - Answers One-time expense for starting a project.
Payback Analysis - Answers Timing of when investment costs are recovered.
Break Even - Answers Point where total revenue equals total costs.
Throughput Analysis - Answers Evaluating overall revenue minus variable costs.
Fixed Costs - Answers Expenses that do not change with production volume.
Payback Period - Answers Time needed to recover initial investment.
Liquidity Concerns - Answers Issues related to cash availability for operations.
Time Value of Money - Answers Concept that money today is worth more than tomorrow.
Discounted Payback Period - Answers Payback period adjusted for time value of money.
Internal Rate of Return (IRR) - Answers Discount rate making net present value zero.
Net Present Value (NPV) - Answers Difference between present value of cash inflows and outflows.
Capital Budgeting Methods - Answers Various techniques for evaluating investment projects.
Project Selection - Answers Choosing projects based on profitability metrics.
Operational Budgeting - Answers Budgeting focused on day-to-day operations.
Financial Leadership - Answers Guidance in financial planning and budgeting.
Cash Flow Forecasts - Answers Predictions of future cash inflows and outflows.
, Project Risks - Answers Potential uncertainties affecting project outcomes.
Investment Decisions - Answers Choices regarding allocation of financial resources.
Capital Allocation - Answers Distribution of financial resources among projects.
Revenue Analysis - Answers Examination of income generated from operations.
Salvage Value - Answers Estimated resale value at project end.
Liquidity - Answers Availability of cash to meet obligations.
Cost of Capital - Answers Minimum return needed for investment justification.
Weighted Average Cost of Capital (WACC) - Answers Average rate of return on all capital sources.
IRR Rule - Answers Accept project if IRR exceeds cost of capital.
Mutually Exclusive Projects - Answers Projects where only one can be accepted.
Unconventional Cash Flows - Answers Cash flows with additional outflows after investment.
Profitability Index (PI) - Answers Ratio of present value to initial investment.
Incremental Budgeting - Answers Budgeting based on previous year's expenses.
Activity-Based Budgeting - Answers Budgeting based on activities driving costs.
Zero-Based Budgeting - Answers Budgeting starts from a zero base.
Operational Budget - Answers Short-term budget for day-to-day operations.
Capital Budget - Answers Long-term financial plan for investments.
Sensitivity Analysis - Answers Assessment of how changes affect NPV.
Project Hurdle Rate - Answers Minimum acceptable return for a project.
Financial Calculator - Answers Tool for computing financial metrics like IRR.
Management Decision Making - Answers Strategic planning based on financial analysis.
Cash Flow Streams - Answers Inflow and outflow of cash over time.
Long-Term Investments - Answers Investments expected to generate returns over years.
Capital Outlays - Answers Funds used for acquiring or maintaining assets.
Discount Rate - Answers Rate used to discount future cash flows.
