Finance

Multiple Choice Questions Unit 3

Ans 1 b Proposal generation

Ans 2 a Transformation

Ans 3 a Opportunity costs

Ans 4 d Taxes

Ans 5 d An increase of 60 ,000

Ans 6 b deductible from ordinary income deductible only against capital gains

Ans 7 b 54 ,240

Ans 8 b 14 ,000

Ans 9 b the difficulty of specifying the appropriate payback period

Ans 10 b Gives explicit consideration to the timing of cash flows and therefore the time value of money

Ans 11 A 3

.33 years

Ans 12 C It depends

Ans 13 C 1 ,700 ,000

Ans 14 d None of the above

Ans 15 C Neither

Ans 16 D Internal rate of return

Ans 17 A Net present value is theoretically superior , but financial managers prefer to use internal rate of return

Ans 18 C The chance that the internal rate of return will exceed the cost of capital

Ans 19 A Sensitivity analysis and scenario analysis

Ans 20 b Simulation analysis

Ans 21 c Risk-adjusted discount rate

Ans 22 c The capital asset pricing model

Ans 23 b Annualized net present value

Ans 24 b Conversion option

Ans 25 a Cost of capital

Multiple Choice Questions Unit 4

Ans 1 c Earnings before interest and taxes

Ans 2 c Both a and b

Ans 3 D Increase

Ans 4 d Do not affect

Ans 5 d operating

Ans 6 b Operating , financial and total

Ans 7 a Total leverage

Ans 8 d A more...