Corporate Finance Exam Newest /Corporate Finance
Exam Preparation / Corporate Finance Practice Exam
With 200 Complete Questions And Correct Detailed
Answers |Already Graded A+|Brand New Version!!
a company that utilizes the MACRS system of depreciation - ans -will have a
greater taxs shield in year two of a project than it would have if the firm had
opted for straight-line depreciation
a project has a discounted payback period that is equal to the required payback
period. Given this which of the following statements must be true? - ans -The
projec tmust also be acceptable under the payback rule AND The project must
have a profitability index that is equal to or greater than 1
a project has a net present value of zero. Which one of the following best
describes this project? - ans -The project's cash inflows equal its cash outflows in
current dollar terms.
A project has a required payback period of three years. Which one of the
following statements is correct concerning the payback analysis of this project? -
ans -The cash flow in year two is valued just as highly as the cash flow in year one.
A project has an initial cost of $27,400 and a market value of $32,600. What is the
difference between these two value called? - ans -net present value
a project with financing type cash flows is typified by a project that has which one
of the following characteristics? - ans -a cash inflow at time zero
A project's average net income divided by its average book value is referred to as
the project's average: - ans -accounting return
Allof the following are related to a proposed project. Which of these should be
included in the case flow at time zero? - ans -Purchase of $1,400 of parts
inventory needed to support the project AND $6,500 of equipment needed to
commence the project
, Applying the discounted payback decision rule to all projects may cause - ans -
some positive net present value projects to be rejected.
Brubaker & Goss has received requests for capital investment funds for next year
from each of its five devisions.... - ans -soft rationing
Changes in the net working capital requirements - ans -can affect the cash flows
of a project every year of the project's life.
Dan is comparing three machines to determine which one to purchase... - ans -
equivalent annual cost
Danielle's is a furniture store that is considering adding appliances to its
offerings... - ans -Utilizing the cred offered by a supplier to purchase the appliance
inventory AND benefiting from increased furniture sales to appliance customers
AND purchasing parts for inventory to handle any appliance repairs that might be
necessary
decreasing which one of the following will increase the acceptability of a project -
ans -equivalent annual cost
Dexte Smith co. is replacing a machine simply because it has worn out... which of
the following statements is correct? - ans -The new machine will generate positive
operating cash flows, at least in the first few years of its life.
Douglass Interiors is consideringtwo mutually exclusive projects and have
determined that the crossover rates for these projects is 11.7 percent. - ans -You
cannot determine which project should be accepted given the information
provided.
Forecasting risk emphasizes the point that the correctness of any decision to
accept or reject a project is highly dependent upon the: - ans -accuracy of the
projected cash flows.
Forecasting risk is defined as the possibly that: - ans -incorrect decisions will be
made due to erroneous cash flow projections
Exam Preparation / Corporate Finance Practice Exam
With 200 Complete Questions And Correct Detailed
Answers |Already Graded A+|Brand New Version!!
a company that utilizes the MACRS system of depreciation - ans -will have a
greater taxs shield in year two of a project than it would have if the firm had
opted for straight-line depreciation
a project has a discounted payback period that is equal to the required payback
period. Given this which of the following statements must be true? - ans -The
projec tmust also be acceptable under the payback rule AND The project must
have a profitability index that is equal to or greater than 1
a project has a net present value of zero. Which one of the following best
describes this project? - ans -The project's cash inflows equal its cash outflows in
current dollar terms.
A project has a required payback period of three years. Which one of the
following statements is correct concerning the payback analysis of this project? -
ans -The cash flow in year two is valued just as highly as the cash flow in year one.
A project has an initial cost of $27,400 and a market value of $32,600. What is the
difference between these two value called? - ans -net present value
a project with financing type cash flows is typified by a project that has which one
of the following characteristics? - ans -a cash inflow at time zero
A project's average net income divided by its average book value is referred to as
the project's average: - ans -accounting return
Allof the following are related to a proposed project. Which of these should be
included in the case flow at time zero? - ans -Purchase of $1,400 of parts
inventory needed to support the project AND $6,500 of equipment needed to
commence the project
, Applying the discounted payback decision rule to all projects may cause - ans -
some positive net present value projects to be rejected.
Brubaker & Goss has received requests for capital investment funds for next year
from each of its five devisions.... - ans -soft rationing
Changes in the net working capital requirements - ans -can affect the cash flows
of a project every year of the project's life.
Dan is comparing three machines to determine which one to purchase... - ans -
equivalent annual cost
Danielle's is a furniture store that is considering adding appliances to its
offerings... - ans -Utilizing the cred offered by a supplier to purchase the appliance
inventory AND benefiting from increased furniture sales to appliance customers
AND purchasing parts for inventory to handle any appliance repairs that might be
necessary
decreasing which one of the following will increase the acceptability of a project -
ans -equivalent annual cost
Dexte Smith co. is replacing a machine simply because it has worn out... which of
the following statements is correct? - ans -The new machine will generate positive
operating cash flows, at least in the first few years of its life.
Douglass Interiors is consideringtwo mutually exclusive projects and have
determined that the crossover rates for these projects is 11.7 percent. - ans -You
cannot determine which project should be accepted given the information
provided.
Forecasting risk emphasizes the point that the correctness of any decision to
accept or reject a project is highly dependent upon the: - ans -accuracy of the
projected cash flows.
Forecasting risk is defined as the possibly that: - ans -incorrect decisions will be
made due to erroneous cash flow projections
