FINC 3610 Final Exam Prep
Newest Actual Exam
net present value
The difference between the present value of an investment's future cash flows and its initial cost is the:
profitability index
internal rate of return
payback period
discounted payback period
,net present value
Any type of project should be accepted if the NPV is positive and rejected if it is negative.
Which statement concerning the net present value (NPV) of an investment or a financing project is
correct?
A financing project should be accepted if, and only if, the NPV is exactly equal to zero.
An investment project should be accepted only if the NPV is equal to the initial cash flow.
An investment project that has positive cash flows for every time period after the initial investment
should be accepted.
Any type of project with greater total cash inflows than total cash outflows, should always be accepted.
Any type of project should be accepted if the NPV is positive and rejected if it is negative.
payback period.
The length of time required for an investment to generate cash flows sufficient to recover the initial cost
of the investment is called the:
discounted payback period.
payback period.
net working capital period.
cash period.
profitability index.
is less than some pre-specified period of time.
An investment is acceptable if the payback period:
exceeds the life of the investment.
,is negative.
is equal to, and only if it is equal to, the investment's life.
is equal to or greater than some pre-specified period of time.
is less than some pre-specified period of time.
discounted payback period.
The length of time required for a project's discounted cash flows to equal the initial cost of the project is
called the:
discounted net present value.
discounted profitability index.
payback period.
net present value.
discounted payback period.
is less than some pre-specified period of time.
The discounted payback rule states that you should accept an investment project if its discounted
payback period:
exceeds some pre-specified period of time.
exceeds the life of the investment.
is less than some pre-specified period of time.
is positive and rejected if it is negative.
is less than the payback period.
, internal rate of return.
The discount rate that makes the net present value of an investment exactly equal to zero is called the:
external rate of return.
internal rate of return.
average accounting return.
equalizer.
profitability index.
profitability index.
The present value of an investment's future cash flows divided by the initial cost of the investment is
called the:
average accounting return.
profitability index.
net present value.
internal rate of return.
profile period.
greater than one.
An independent investment is acceptable if the profitability index (PI) of the investment is:
less than the internal rate of return.
greater than one.
greater than the internal rate of return.
greater than a pre-specified rate of return.
less than one.
Newest Actual Exam
net present value
The difference between the present value of an investment's future cash flows and its initial cost is the:
profitability index
internal rate of return
payback period
discounted payback period
,net present value
Any type of project should be accepted if the NPV is positive and rejected if it is negative.
Which statement concerning the net present value (NPV) of an investment or a financing project is
correct?
A financing project should be accepted if, and only if, the NPV is exactly equal to zero.
An investment project should be accepted only if the NPV is equal to the initial cash flow.
An investment project that has positive cash flows for every time period after the initial investment
should be accepted.
Any type of project with greater total cash inflows than total cash outflows, should always be accepted.
Any type of project should be accepted if the NPV is positive and rejected if it is negative.
payback period.
The length of time required for an investment to generate cash flows sufficient to recover the initial cost
of the investment is called the:
discounted payback period.
payback period.
net working capital period.
cash period.
profitability index.
is less than some pre-specified period of time.
An investment is acceptable if the payback period:
exceeds the life of the investment.
,is negative.
is equal to, and only if it is equal to, the investment's life.
is equal to or greater than some pre-specified period of time.
is less than some pre-specified period of time.
discounted payback period.
The length of time required for a project's discounted cash flows to equal the initial cost of the project is
called the:
discounted net present value.
discounted profitability index.
payback period.
net present value.
discounted payback period.
is less than some pre-specified period of time.
The discounted payback rule states that you should accept an investment project if its discounted
payback period:
exceeds some pre-specified period of time.
exceeds the life of the investment.
is less than some pre-specified period of time.
is positive and rejected if it is negative.
is less than the payback period.
, internal rate of return.
The discount rate that makes the net present value of an investment exactly equal to zero is called the:
external rate of return.
internal rate of return.
average accounting return.
equalizer.
profitability index.
profitability index.
The present value of an investment's future cash flows divided by the initial cost of the investment is
called the:
average accounting return.
profitability index.
net present value.
internal rate of return.
profile period.
greater than one.
An independent investment is acceptable if the profitability index (PI) of the investment is:
less than the internal rate of return.
greater than one.
greater than the internal rate of return.
greater than a pre-specified rate of return.
less than one.
