IVY Corporate Finance Practice
Comprehensive Resource To Help You Ace 2026-2027
Includes Frequently Tested Questions With ELABORATED
100% Correct COMPLETE SOLUTIONS
Guaranteed Pass First Attempt!!
Current Update!!
1. Jake Cherson is saving for a new tractor that costs $60,000. Appoximately how
much money must he set aside now to have $60,000 in five years if the annual
compound interest rate is 10%?
Select one:
a. $36,180
b. $37,254
c. $41,210
d. $40,640
- ANSWER $37,254
2. To assess the present value of a future cash flow, you would
Select one:
a. discount the cash flow back to the present.
b. compound the cash flow to the future.
c. discount the cash flow one year into the future.
d. A and C.
- ANSWER discount the cash flow back to the present.
3. An increase in risk should carry with it an increase in return.
Select one:
,a. TRUE
b. FALSE
- ANSWER TRUE
3. Value is added to the firm when
Select one:
a. earnings are enhanced.
b. financial risks are reduced.
c. A and B.
d. none of the above.
- ANSWER A and B - Earnings are enhanced & financial risks are reduced.
4. Management has two methods by which it can add value to the firm through
components on either side of the accounting equality.
Select one:
a. TRUE
b. FALSE
- ANSWER TRUE
5. Ellen Hopkins is saving for a new car that costs $34,000. Approximately how
many money must Ellen set aside now to have $34,000 in 3 years if the annual
compund interest rate is 8%?
Select one:
a.$26,989
b.$24,610
c.$23,940
d.$26,040
- ANSWER $26,989
6. Stock price appreciation and dividends paid are the two primary sources of
stockholder returns.
,Select one:
a. TRUE
b. FALSE
- ANSWER TRUE
7. If stockholders perceive that the financial risk of a firm has decreased and all
other factors are the same, then the stock price will probably rise.
Select one:
a. TRUE
b. FALSE
- ANSWER TRUE
8. The present value equation is a rearrangement of the future value equation.
Select one:
a. TRUE
b. FALSE
- ANSWER TRUE
9. In calculating the present value, the rate of return that an individual is certain
can be achieved may be used as a discount factor.
Select one:
a. TRUE
b. FALSE
- ANSWER TRUE
10. Which of the following discounted cash flow techniques matches the present
value with the future value so that the net result is zero ?
Select one:
a. NPV
b. IRR
c. discounted payback
d. present value index
, - ANSWER IRR
11. The payback method accounts for the time value of money.
Select one:
a. TRUE
b. FALSE
- ANSWER False
12. The present value index accounts for the present value of annual cash flows
and the initial investment.
Select one:
a. TRUE
b. FALSE
- ANSWER TRUE
13. In a capital budgeting analysis, taxes may be
Select one:
a. a cost
b. a benefit
c. both A and B
d. neither A nor B
- ANSWER Both A and B - Cost and benefit
14. Which of the following items is a cost in a capital budgeting incremental
analysis?
Select one:
a. Major overhaul
b. Cost savings from old asset
c. Salvage value of new asset
d. None of the above
- ANSWER Major overhaul
Comprehensive Resource To Help You Ace 2026-2027
Includes Frequently Tested Questions With ELABORATED
100% Correct COMPLETE SOLUTIONS
Guaranteed Pass First Attempt!!
Current Update!!
1. Jake Cherson is saving for a new tractor that costs $60,000. Appoximately how
much money must he set aside now to have $60,000 in five years if the annual
compound interest rate is 10%?
Select one:
a. $36,180
b. $37,254
c. $41,210
d. $40,640
- ANSWER $37,254
2. To assess the present value of a future cash flow, you would
Select one:
a. discount the cash flow back to the present.
b. compound the cash flow to the future.
c. discount the cash flow one year into the future.
d. A and C.
- ANSWER discount the cash flow back to the present.
3. An increase in risk should carry with it an increase in return.
Select one:
,a. TRUE
b. FALSE
- ANSWER TRUE
3. Value is added to the firm when
Select one:
a. earnings are enhanced.
b. financial risks are reduced.
c. A and B.
d. none of the above.
- ANSWER A and B - Earnings are enhanced & financial risks are reduced.
4. Management has two methods by which it can add value to the firm through
components on either side of the accounting equality.
Select one:
a. TRUE
b. FALSE
- ANSWER TRUE
5. Ellen Hopkins is saving for a new car that costs $34,000. Approximately how
many money must Ellen set aside now to have $34,000 in 3 years if the annual
compund interest rate is 8%?
Select one:
a.$26,989
b.$24,610
c.$23,940
d.$26,040
- ANSWER $26,989
6. Stock price appreciation and dividends paid are the two primary sources of
stockholder returns.
,Select one:
a. TRUE
b. FALSE
- ANSWER TRUE
7. If stockholders perceive that the financial risk of a firm has decreased and all
other factors are the same, then the stock price will probably rise.
Select one:
a. TRUE
b. FALSE
- ANSWER TRUE
8. The present value equation is a rearrangement of the future value equation.
Select one:
a. TRUE
b. FALSE
- ANSWER TRUE
9. In calculating the present value, the rate of return that an individual is certain
can be achieved may be used as a discount factor.
Select one:
a. TRUE
b. FALSE
- ANSWER TRUE
10. Which of the following discounted cash flow techniques matches the present
value with the future value so that the net result is zero ?
Select one:
a. NPV
b. IRR
c. discounted payback
d. present value index
, - ANSWER IRR
11. The payback method accounts for the time value of money.
Select one:
a. TRUE
b. FALSE
- ANSWER False
12. The present value index accounts for the present value of annual cash flows
and the initial investment.
Select one:
a. TRUE
b. FALSE
- ANSWER TRUE
13. In a capital budgeting analysis, taxes may be
Select one:
a. a cost
b. a benefit
c. both A and B
d. neither A nor B
- ANSWER Both A and B - Cost and benefit
14. Which of the following items is a cost in a capital budgeting incremental
analysis?
Select one:
a. Major overhaul
b. Cost savings from old asset
c. Salvage value of new asset
d. None of the above
- ANSWER Major overhaul
