1/8/26, 4:21 AM BUSFIN 3220 3220 Final Conceptual EXAM (updated 2026) Questions & Answers | Latest Already Graded A+ UPDATE 2025|2026 F…
BUSFIN 3220 3220 Final Conceptual EXAM
(updated 2026) Questions & Answers | Latest
Already Graded A+ UPDATE 2025|2026
Save
Terms in this set (29)
McDonald's is planning to open a True
new store across from the student
union. Annual revenues are expected
to be $5 million. However, opening
the new location will cause annual
revenues to drop by $3 million at
McDonald's existing stadium
location. The relevant sales revenues
for the capital budgeting analysis are
$2 million per year.
A) True
B) False
https://quizlet.com/1128240569/busfin-3220-3220-final-conceptual-exam-updated-2026-questions-answers-latest-already-graded-a-update-20252026… 1/21
,1/8/26, 4:21 AM BUSFIN 3220 3220 Final Conceptual EXAM (updated 2026) Questions & Answers | Latest Already Graded A+ UPDATE 2025|2026 F…
Global Spice Co. is considering a Increase the cost of capital used to evaluate the
new project, but all methods for project to reflect its higher-than-average risk.
assessing risk indicate that the
project's risk is greater than the risk
of the firm's average project. In
evaluating this project, it would be
reasonable for Global Spice's
management to do which of the
following?
A) Increase the cost of capital used
to evaluate the project to reflect its
higher-than-average risk.
B) Increase the estimated IRR of the
project to reflect its greater risk.
C) Increase the estimated NPV of the
project to reflect its greater risk.
D) Reject the project, as its
acceptance would increase the firm's
risk.
E) Ignore the risk differential if the
project would amount to only a small
fraction of the firm's total assets.
In capital budgeting decisions, Institutional investors
corporate risk will be of least interest
to _____.
A) employees
B) stockholders with few shares
C) institutional investors
D) creditors
E) the local community
https://quizlet.com/1128240569/busfin-3220-3220-final-conceptual-exam-updated-2026-questions-answers-latest-already-graded-a-update-20252026… 2/21
, 1/8/26, 4:21 AM BUSFIN 3220 3220 Final Conceptual EXAM (updated 2026) Questions & Answers | Latest Already Graded A+ UPDATE 2025|2026 F…
When conducting a replacement Are derived by subtracting the cash flows for the
analysis, the incremental cash flows old project from the cash flows for the new project
_____.
A) are derived by subtracting the
cash flows for the old project from
the cash flows for the new project
B) are derived by subtracting the
cash flows for the new project from
the cash flows for the old project
C) are derived by adding the cash
flows for the new project to the cash
flows for the old project
D) should not be considered; cash
flow differentials between the old
and new projects should be used
instead
E) should be considered if and only
if the IRR is greater than the NPV
https://quizlet.com/1128240569/busfin-3220-3220-final-conceptual-exam-updated-2026-questions-answers-latest-already-graded-a-update-20252026… 3/21
BUSFIN 3220 3220 Final Conceptual EXAM
(updated 2026) Questions & Answers | Latest
Already Graded A+ UPDATE 2025|2026
Save
Terms in this set (29)
McDonald's is planning to open a True
new store across from the student
union. Annual revenues are expected
to be $5 million. However, opening
the new location will cause annual
revenues to drop by $3 million at
McDonald's existing stadium
location. The relevant sales revenues
for the capital budgeting analysis are
$2 million per year.
A) True
B) False
https://quizlet.com/1128240569/busfin-3220-3220-final-conceptual-exam-updated-2026-questions-answers-latest-already-graded-a-update-20252026… 1/21
,1/8/26, 4:21 AM BUSFIN 3220 3220 Final Conceptual EXAM (updated 2026) Questions & Answers | Latest Already Graded A+ UPDATE 2025|2026 F…
Global Spice Co. is considering a Increase the cost of capital used to evaluate the
new project, but all methods for project to reflect its higher-than-average risk.
assessing risk indicate that the
project's risk is greater than the risk
of the firm's average project. In
evaluating this project, it would be
reasonable for Global Spice's
management to do which of the
following?
A) Increase the cost of capital used
to evaluate the project to reflect its
higher-than-average risk.
B) Increase the estimated IRR of the
project to reflect its greater risk.
C) Increase the estimated NPV of the
project to reflect its greater risk.
D) Reject the project, as its
acceptance would increase the firm's
risk.
E) Ignore the risk differential if the
project would amount to only a small
fraction of the firm's total assets.
In capital budgeting decisions, Institutional investors
corporate risk will be of least interest
to _____.
A) employees
B) stockholders with few shares
C) institutional investors
D) creditors
E) the local community
https://quizlet.com/1128240569/busfin-3220-3220-final-conceptual-exam-updated-2026-questions-answers-latest-already-graded-a-update-20252026… 2/21
, 1/8/26, 4:21 AM BUSFIN 3220 3220 Final Conceptual EXAM (updated 2026) Questions & Answers | Latest Already Graded A+ UPDATE 2025|2026 F…
When conducting a replacement Are derived by subtracting the cash flows for the
analysis, the incremental cash flows old project from the cash flows for the new project
_____.
A) are derived by subtracting the
cash flows for the old project from
the cash flows for the new project
B) are derived by subtracting the
cash flows for the new project from
the cash flows for the old project
C) are derived by adding the cash
flows for the new project to the cash
flows for the old project
D) should not be considered; cash
flow differentials between the old
and new projects should be used
instead
E) should be considered if and only
if the IRR is greater than the NPV
https://quizlet.com/1128240569/busfin-3220-3220-final-conceptual-exam-updated-2026-questions-answers-latest-already-graded-a-update-20252026… 3/21
