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Cfin FDM Exam Questions With Verified Answers

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©THEBRIGHT EXAM SOLUTIONS 2024/2025 ALL RIGHTS RESERVED. Cfin FDM Exam Questions With Verified Answers Business is all about making _______? - Answersdecisions The goal is to make decisions that _____? - AnswersIncrease Value Decisions that increase value include: - Answers1. Accounting for possible future outcomes (use expected cash flows) 2. Account for TVM (measured in terms of dollars today) 3. Benchmark to an alternative (account for opportunity cost) Making money is not the same as - Answerscreating value Accept an NPV when - AnswersNPV 0 A dollar today is worth _____ than a dollar tomorrow. - AnswersMore; due to inflation the value of the dollar right now decreases over time The NPV is.... - AnswersThe dollar value added today from taking on a project. -Cash Flows discounted back to get NPV. When to accept NPV - Answers-Greater than zero -Or if two projects, accept higher number What is the discount rate? - Answers-The opportunity cost -Hurdle rate -Used mostly in comparison with IRR -Positive NPV projects ______ firm value/shareholder wealth by the NPV -Negative NPV projects ______ firm value/shareholder wealth by the NPV -Zero NPV projects have no effect on your current wealth - Answers-increase

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©THEBRIGHT EXAM SOLUTIONS 2024/2025

ALL RIGHTS RESERVED.


Cfin FDM Exam Questions With Verified
Answers


Business is all about making _______? - Answers✔decisions

The goal is to make decisions that _____? - Answers✔Increase Value

Decisions that increase value include: - Answers✔1. Accounting for possible future outcomes
(use expected cash flows)
2. Account for TVM (measured in terms of dollars today)
3. Benchmark to an alternative (account for opportunity cost)

Making money is not the same as - Answers✔creating value

Accept an NPV when - Answers✔NPV > 0

A dollar today is worth _____ than a dollar tomorrow. - Answers✔More; due to inflation the
value of the dollar right now decreases over time

The NPV is.... - Answers✔The dollar value added today from taking on a project.
-Cash Flows discounted back to get NPV.

When to accept NPV - Answers✔-Greater than zero
-Or if two projects, accept higher number

What is the discount rate? - Answers✔-The opportunity cost
-Hurdle rate
-Used mostly in comparison with IRR
-Positive NPV projects ______ firm value/shareholder wealth by the NPV
-Negative NPV projects ______ firm value/shareholder wealth by the NPV

-Zero NPV projects have no effect on your current wealth - Answers✔-increase

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