LSUS MBA-703 ACTUAL CERTIFICATION
PAPER 2026 QUESTIONS WITH ANSWERS
FULL SOLUTION.
⫸ True. Ans: T or F: often a gap exists between the time when costs are
incurred and when benefits are received
⫸ present value analysis. Ans: used by managers to properly account for
the timing of receipts and expenditures
⫸ the present value of a single future value. Ans: what does present
value analysis 1 evaluate?
⫸ PV = FV / (1+i)^n
i --> interest rate (decimal) or opportunity cost of funds
n --> years in the future. Ans: equation for the present value analysis 1
for the amount that would have to be invested today at the prevailing
interest rate to generate the given future value
⫸ PV=FV - OCW
, OCW --> opportunity cost of waiting. Ans: equation for the present
value analysis 1 where present value reflects the difference between the
future value and the opportunity cost of waiting
⫸ the present value of a stream of future values. Ans: what does the
present value analysis 2 evaluate?
⫸ PV = FV1/(1+i)^1 + FV2/(1+i)^2 +L + FVn/(1+i)^n
L -->
???????????????. Ans: equation for the present value analysis 2
⫸ False, PV will equal FV if the interest rate is 0. Ans: T or F: when the
interest rate is 0, PV doesn't equal FV
⫸ net present value. Ans: the present value of the income stream
generated by a project minus the current cost of the project
⫸ NPV = FV1/(1+i)^1 + FV2/(1+i)^2 + L + FVn/(1+i)^n - C0
C0 --> current cost. Ans: Net present value equation
⫸ profit maximization. Ans: maximizing the value of the firm, which is
the present value of current and future profits
PAPER 2026 QUESTIONS WITH ANSWERS
FULL SOLUTION.
⫸ True. Ans: T or F: often a gap exists between the time when costs are
incurred and when benefits are received
⫸ present value analysis. Ans: used by managers to properly account for
the timing of receipts and expenditures
⫸ the present value of a single future value. Ans: what does present
value analysis 1 evaluate?
⫸ PV = FV / (1+i)^n
i --> interest rate (decimal) or opportunity cost of funds
n --> years in the future. Ans: equation for the present value analysis 1
for the amount that would have to be invested today at the prevailing
interest rate to generate the given future value
⫸ PV=FV - OCW
, OCW --> opportunity cost of waiting. Ans: equation for the present
value analysis 1 where present value reflects the difference between the
future value and the opportunity cost of waiting
⫸ the present value of a stream of future values. Ans: what does the
present value analysis 2 evaluate?
⫸ PV = FV1/(1+i)^1 + FV2/(1+i)^2 +L + FVn/(1+i)^n
L -->
???????????????. Ans: equation for the present value analysis 2
⫸ False, PV will equal FV if the interest rate is 0. Ans: T or F: when the
interest rate is 0, PV doesn't equal FV
⫸ net present value. Ans: the present value of the income stream
generated by a project minus the current cost of the project
⫸ NPV = FV1/(1+i)^1 + FV2/(1+i)^2 + L + FVn/(1+i)^n - C0
C0 --> current cost. Ans: Net present value equation
⫸ profit maximization. Ans: maximizing the value of the firm, which is
the present value of current and future profits
