Question 1

The method of financing a project affects the determination of its cash flows for capital budgeting purposes.

Accepted Answer

A) True 
 B)False

Question 2

A proposed project requires an initial investment of $8,500 in current assets,75% of which will be financed with accounts payable.The project will have:

Accepted Answer

A)  an initial cash outflow of $8,500 at time zero for net working capital. 
B)  a cash outflow for net working capital at the end of the project. 
C)  a cash inflow at the end of the project from net working capital. 
D)  a cash outflow for net working capital every year of the project's life. 
A)  an initial cash outflow of $8,500 at time zero for net working capital. 
B)  a cash outflow for net working capital at the end of the project. 
C)  a cash inflow at the end of the project from net working capital. 
D)  a cash outflow for net working capital every year of the project's life.

Question 3

The NPV of an investment proposal becomes negative solely as a result of allocating a portion of the corporation president's salary.It is most likely the case that:

Accepted Answer

A)  the project should be accepted. 
B)  rejecting the project is the correct decision. 
C)  the allocation should be postponed until the project is accepted. 
D)  the salary should be considered an opportunity cost of the project. 
A)  the project should be accepted. 
B)  rejecting the project is the correct decision. 
C)  the allocation should be postponed until the project is accepted. 
D)  the salary should be considered an opportunity cost of the project.

Question 4

A reduction in working capital increases cash flows.

Accepted Answer

A) True 
 B)False

The method of financing a project affects the determination of its cash flows for capital budgeting purposes.

A proposed project requires an initial investment of $8,500 in current assets,75% of which will be financed with accounts payable.The project will have:

The NPV of an investment proposal becomes negative solely as a result of allocating a portion of the corporation president's salary.It is most likely the case that:

A reduction in working capital increases cash flows.

Goals and Governance of the Firm

Financial Markets and Institutions

Accounting and Finance

Measuring Corporate Performance

The Time Value of Money

Valuing Bonds

Valuing Stocks

Net Present Value and Other Investment Criteria

Project Analysis

Introduction to Risk, Return, and the Opportunity Cost of Capital

Risk,Return,and Capital Budgeting

The Weighted-Average Cost of Capital and Company Valuation

Introduction to Corporate Financing and Governance

Venture Capital, IPOs, and Seasoned Offerings

Debt Policy

Payout Policy

Long-Term Financial Planning

Short-Term Financial Planning

Working Capital Management

Mergers,Acquisitions,and Corporate Control

International Financial Management

Options

Risk Management

Filters

Exam 9: Using Discounted Cash-Flow Analysis to Make Investment Decisions

The method of financing a project affects the determination of its cash flows for capital budgeting purposes.

A proposed project requires an initial investment of $8,500 in current assets,75% of which will be financed with accounts payable.The project will have:

The NPV of an investment proposal becomes negative solely as a result of allocating a portion of the corporation president's salary.It is most likely the case that:

A reduction in working capital increases cash flows.

Goals and Governance of the Firm

Financial Markets and Institutions

Accounting and Finance

Measuring Corporate Performance

The Time Value of Money

Valuing Bonds

Valuing Stocks

Net Present Value and Other Investment Criteria

Project Analysis

Introduction to Risk, Return, and the Opportunity Cost of Capital

Risk,Return,and Capital Budgeting

The Weighted-Average Cost of Capital and Company Valuation

Introduction to Corporate Financing and Governance

Venture Capital, IPOs, and Seasoned Offerings

Debt Policy

Payout Policy

Long-Term Financial Planning

Short-Term Financial Planning

Working Capital Management

Mergers,Acquisitions,and Corporate Control

International Financial Management

Options

Risk Management

Filters