FNAN 522 - FINAL | Questions with 100% Verified Answers |
Latest Update 2026/2027
Question: Which of the following statements regarding the cash
conversion cycle (CCC) is correct? Select one:
a. All of these answers.
b. Rising cash conversion cycle often indicates deterioration in
cash flows, while declining cash conversion cycle generally
signals improving cash flows.
c. The cash conversion cycle is written to analyze firms that
conducts its business solely using cash.
d. The cash conversion cycle is directly observed from a
business's cash flows.
Answer: b. Rising cash conversion cycle often indicates deterioration in cash flows, while
declining
cash conversion cycle generally signals improving cash flows.
Question: Which of the following statements correctly states a risk
associated with inventory management? Select one:
a. All of these answers.
b. Excessive inventory limits the company's growth potential.
c. Managing inventory is complicated due to factors like
inflation and seasonality.
d. Inadequate inventory will result insufficient materials for
production.
Answer: a. All of these answers.
Question: Which of the following is the primary purpose of inventory
management? Select one:
a. To improve cash flows to a company's vendors.
b. To monitor the amount of material into and out of
stockroom locations.
c. To ensure that customers get their product while minimizing
inventory costs for the company.
d. To establish production goals.
Answer: c. To ensure that customers get their product while minimizing inventory costs for the
company.
Question: Which of the following is a reason to always have cash on
hand?
Select one:
a. It increases a company's liquidity.
b. It can be used immediately to perform economic actions,
such as paying outstanding debts.
c. All of these answers.
d. It allows the company to meet its obligations without
incurring avoidable losses.
Answer: c. All of these answers.
, Question: A company is considering a project that has a discount rate of
5%. It will require an initial investment of $200,000. In the first
year, it will have $100,000 in net cash inflows (one year after
the initial investment). In year 2, it will have cash inflows of
$100,000 (two years after the initial investment), and in year 3
the project will generate $200,000 (three years after the initial
investment). What is the project's NPV? Assume all cash flows
occur at the end of
the year. Select one:
a. $190,476
b. $358,708
c. $158,709
d. $193,204
Answer: c. $158,709
Question: A project has an initial investment requirement of $100,000. In
year 1, it should earn $25,000; in year two, $30,000; and in year
3, $50,000. What is the project's internal rate of return?
Assume the cash flows in years one, two, and three happen at
the end of the year.
Select one:
a. 5.0%
b. 6.21%
c. 7.56%
d. 2.21%
Answer: d. 2.21%
Question: In which of the following situations would it be appropriate to
use the IRR method to make an investment decision? Select
one:
a. To compare two projects that have an equal initial
investment and
lifespan.
b. All of these answers.
c. To assess a project which cash flows fluctuate between
positive and negative.
d. To compare two investments that have different durations.
Answer: d. To compare two investments that have different durations.
Latest Update 2026/2027
Question: Which of the following statements regarding the cash
conversion cycle (CCC) is correct? Select one:
a. All of these answers.
b. Rising cash conversion cycle often indicates deterioration in
cash flows, while declining cash conversion cycle generally
signals improving cash flows.
c. The cash conversion cycle is written to analyze firms that
conducts its business solely using cash.
d. The cash conversion cycle is directly observed from a
business's cash flows.
Answer: b. Rising cash conversion cycle often indicates deterioration in cash flows, while
declining
cash conversion cycle generally signals improving cash flows.
Question: Which of the following statements correctly states a risk
associated with inventory management? Select one:
a. All of these answers.
b. Excessive inventory limits the company's growth potential.
c. Managing inventory is complicated due to factors like
inflation and seasonality.
d. Inadequate inventory will result insufficient materials for
production.
Answer: a. All of these answers.
Question: Which of the following is the primary purpose of inventory
management? Select one:
a. To improve cash flows to a company's vendors.
b. To monitor the amount of material into and out of
stockroom locations.
c. To ensure that customers get their product while minimizing
inventory costs for the company.
d. To establish production goals.
Answer: c. To ensure that customers get their product while minimizing inventory costs for the
company.
Question: Which of the following is a reason to always have cash on
hand?
Select one:
a. It increases a company's liquidity.
b. It can be used immediately to perform economic actions,
such as paying outstanding debts.
c. All of these answers.
d. It allows the company to meet its obligations without
incurring avoidable losses.
Answer: c. All of these answers.
, Question: A company is considering a project that has a discount rate of
5%. It will require an initial investment of $200,000. In the first
year, it will have $100,000 in net cash inflows (one year after
the initial investment). In year 2, it will have cash inflows of
$100,000 (two years after the initial investment), and in year 3
the project will generate $200,000 (three years after the initial
investment). What is the project's NPV? Assume all cash flows
occur at the end of
the year. Select one:
a. $190,476
b. $358,708
c. $158,709
d. $193,204
Answer: c. $158,709
Question: A project has an initial investment requirement of $100,000. In
year 1, it should earn $25,000; in year two, $30,000; and in year
3, $50,000. What is the project's internal rate of return?
Assume the cash flows in years one, two, and three happen at
the end of the year.
Select one:
a. 5.0%
b. 6.21%
c. 7.56%
d. 2.21%
Answer: d. 2.21%
Question: In which of the following situations would it be appropriate to
use the IRR method to make an investment decision? Select
one:
a. To compare two projects that have an equal initial
investment and
lifespan.
b. All of these answers.
c. To assess a project which cash flows fluctuate between
positive and negative.
d. To compare two investments that have different durations.
Answer: d. To compare two investments that have different durations.
