Fin Exam
Question 1
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A project has initial costs of $3,000 and subsequent cash inflows in years 1 ? 4 of $1350, 275, 875, and 1525. The company's cost of capital is 10%. Calculate the payback period for this project.
Select one:
A. 3.33 years
B. 3.67 years
C. 4.00 years
D. 4.25 years
Question 2
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A project has initial costs of $3,000 and subsequent cash inflows in years 1 ? 4 of $1350, 275, 875, and 1525. The company's cost of capital is 10%. Calculate NPV for this project.
Select one:
A. $154
B. $174
C. $275
D. $325
Question 3
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A project has initial costs of $3,000 and subsequent cash inflows in years 1 ? 4 of $1350, 275, 875, and 1525. The company's cost of capital is 10%. Calculate IRR for this project.
Select one:
A. 10.00%
B. 11.75%
C. 12.25%
D. 13.15%
Question 4
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A project has initial costs of $3,000 and subsequent cash inflows in years 1 ? 4 of $1350, 275, 875, and 1525. The company's cost of capital is 10%. Calculate MIRR for this project.
Select one:
A. 11.38%
B. 12.28%
C. 14.00%
D. 14.28%
Question 5
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A project has initial costs of $3,000 and subsequent cash inflows in years 1 ? 4 of $1350, 275, 875, and 1525. The company's cost of capital is 10%. Calculate the Profitability Index for this project.
Select one:
A. 1.00
B. 1.05
C. 1.10
D. 1.15
Question 6
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Assume a project has normal cash flows (that is, the initial cash flow is negative, and all other cash flows are positive). All else equal, which of the following statements is most correct?
Select one:
A. a project?s IRR increases as the cost of capital declines
B. a project?s NPV
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A project has initial costs of $3,000 and subsequent cash inflows in years 1 ? 4 of $1350, 275, 875, and 1525. The company's cost of capital is 10%. Calculate the payback period for this project.
Select one:
A. 3.33 years
B. 3.67 years
C. 4.00 years
D. 4.25 years
Question 2
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A project has initial costs of $3,000 and subsequent cash inflows in years 1 ? 4 of $1350, 275, 875, and 1525. The company's cost of capital is 10%. Calculate NPV for this project.
Select one:
A. $154
B. $174
C. $275
D. $325
Question 3
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A project has initial costs of $3,000 and subsequent cash inflows in years 1 ? 4 of $1350, 275, 875, and 1525. The company's cost of capital is 10%. Calculate IRR for this project.
Select one:
A. 10.00%
B. 11.75%
C. 12.25%
D. 13.15%
Question 4
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A project has initial costs of $3,000 and subsequent cash inflows in years 1 ? 4 of $1350, 275, 875, and 1525. The company's cost of capital is 10%. Calculate MIRR for this project.
Select one:
A. 11.38%
B. 12.28%
C. 14.00%
D. 14.28%
Question 5
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A project has initial costs of $3,000 and subsequent cash inflows in years 1 ? 4 of $1350, 275, 875, and 1525. The company's cost of capital is 10%. Calculate the Profitability Index for this project.
Select one:
A. 1.00
B. 1.05
C. 1.10
D. 1.15
Question 6
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Assume a project has normal cash flows (that is, the initial cash flow is negative, and all other cash flows are positive). All else equal, which of the following statements is most correct?
Select one:
A. a project?s IRR increases as the cost of capital declines
B. a project?s NPV