Capital Decision

8 Questions  I  By Ashi3104
The test will measure your knowledge on finance concepts such as Payback period, NPV, IRR, MIRR, Depreciation and other concepts involved in making capital decisions.

  
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Question Excerpt

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1.  When evaluating a new project, the firm should consider all of the following factors except:
A.
B.
C.
D.
E.
2.  Other things held constant, which of the following would increase the NPV of a project being considered?
A.
B.
C.
D.
E.
3.  Which of the following statements is correct? 
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B.
C.
D.
E.
4.  Assume a project has normal cash flows (that is, the initial cash flow is negative, and all other cash flows are positive). Which of the following statements is most correct?
A.
B.
C.
D.
E.
5.  Two projects being considered by a firm are mutually exclusive and have the following projected cash flows.               Project A           Project B  Year        Cash Flow           Cash Flow    0         ($100,000)         ($100,000)   1            39,500                   0    2            39,500                   0    3            39,500             133,000    Based only on the information given, which of the two projects would be preferred, and why?
A.
B.
C.
D.
E.
6.  Which of the following statement completions is incorrect?  For a profitable firm, when MACRS accelerated depreciation is compared to straight-line depreciation, MACRS accelerated allowances produce
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B.
C.
D.
E.
7.  In theory, the decision maker should view market risk as being of primary importance. However, within-firm, or corporate, risk is relevant to a firm's
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B.
C.
D.
E.
8.  Monte Carlo simulation
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B.
C.
D.
E.
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