FIN 300 Final Exam (Latest Update 2026 /
2027) Questions and Verified Answers
{Grade A} 100 % Correct - BYU
If you start with incremental net operating profits after tax (NOPAT) and add
depreciation and amortization to it, you will obtain incremental cash flows from
operations - correct answer True
Accounting earnings are a reliable measure of the costs and benefits of a project -
correct answer False
If taken without accompanying changes in cash flow, changes in a company's
accounting earnings do not impact the overall value of the firm - correct answer True
The research and development costs to date of a project should be considered when
analyzing the cash flows of a prospective project - correct answer False
Since our perspective when evaluating a project is that of all the shareholders only,
then we should evaluate the after-tax cash flows produced by a project - correct
answer True
a progressive tax system means that a taxpayer will pay a higher tex rate for a given
dollar of earnings for every successive year - correct answer False
It is possible for a firm to have one depreciation schedule for tax purposes and
another for financial reporting purposes - correct answer True
, FIN 300 Final Exam (Latest Update 2026 /
2027) Questions and Verified Answers
{Grade A} 100 % Correct - BYU
[Blank] refers to the cash flow that a project is expected to generate after all
operating expenses and taxes have been paid - correct answer Incremental cash flow
from operations
The idea that we can evaluate the cash flows from a project independently of the
cash flows for the firm is known as: - correct answer The stand-alone principle
The firm's [blank] is used to calculate NOPAT because the profits from a project are
assumed to be incremental to the firm - correct answer Marginal tax rate
Corporate overhead allocations should only be taken into account on a project
analysis if:
A) The firm is currently covering all of its overhead allocations
B) The firm is currently unable to cover all of its overhead allocations
C) the overhead allocations involve cash expenditures
D) None of the above - correct answer D) None of the above
Which of the following is the best example of a sunk cost
A) Future payments on a leased building
B) Historical non-cash expenses
C) Historical research and development costs
, FIN 300 Final Exam (Latest Update 2026 /
2027) Questions and Verified Answers
{Grade A} 100 % Correct - BYU
D) Future research and development costs - correct answer C) Historical research and
development costs
[Blank] represents dollars stated in terms of constant purchasing power - correct
answer Real dollars
When estimating the free cash flows for a project we must account for - correct
answer Incremental cash flows from capital expenditures
When we calculate the free cash flows for a project, we first must compute the -
correct answer Incremental cash flows from operations
Which of the following statements is correct?
A) Incremental net operating profits after-tax exclude the effects of financing costs
associated with a project
B) Incremental net operating profits after-tax should include sunk costs associated
with a project
C) Incremental net operating profits after-tax should exclude the effects of
depreciation costs associated with a project
D) Incremental net operating profits after-tax should include the effects of financing
costs associated with a project - correct answer A)Incremental net operating profits
after-tax should exclude the effects of financing costs associated with a project
2027) Questions and Verified Answers
{Grade A} 100 % Correct - BYU
If you start with incremental net operating profits after tax (NOPAT) and add
depreciation and amortization to it, you will obtain incremental cash flows from
operations - correct answer True
Accounting earnings are a reliable measure of the costs and benefits of a project -
correct answer False
If taken without accompanying changes in cash flow, changes in a company's
accounting earnings do not impact the overall value of the firm - correct answer True
The research and development costs to date of a project should be considered when
analyzing the cash flows of a prospective project - correct answer False
Since our perspective when evaluating a project is that of all the shareholders only,
then we should evaluate the after-tax cash flows produced by a project - correct
answer True
a progressive tax system means that a taxpayer will pay a higher tex rate for a given
dollar of earnings for every successive year - correct answer False
It is possible for a firm to have one depreciation schedule for tax purposes and
another for financial reporting purposes - correct answer True
, FIN 300 Final Exam (Latest Update 2026 /
2027) Questions and Verified Answers
{Grade A} 100 % Correct - BYU
[Blank] refers to the cash flow that a project is expected to generate after all
operating expenses and taxes have been paid - correct answer Incremental cash flow
from operations
The idea that we can evaluate the cash flows from a project independently of the
cash flows for the firm is known as: - correct answer The stand-alone principle
The firm's [blank] is used to calculate NOPAT because the profits from a project are
assumed to be incremental to the firm - correct answer Marginal tax rate
Corporate overhead allocations should only be taken into account on a project
analysis if:
A) The firm is currently covering all of its overhead allocations
B) The firm is currently unable to cover all of its overhead allocations
C) the overhead allocations involve cash expenditures
D) None of the above - correct answer D) None of the above
Which of the following is the best example of a sunk cost
A) Future payments on a leased building
B) Historical non-cash expenses
C) Historical research and development costs
, FIN 300 Final Exam (Latest Update 2026 /
2027) Questions and Verified Answers
{Grade A} 100 % Correct - BYU
D) Future research and development costs - correct answer C) Historical research and
development costs
[Blank] represents dollars stated in terms of constant purchasing power - correct
answer Real dollars
When estimating the free cash flows for a project we must account for - correct
answer Incremental cash flows from capital expenditures
When we calculate the free cash flows for a project, we first must compute the -
correct answer Incremental cash flows from operations
Which of the following statements is correct?
A) Incremental net operating profits after-tax exclude the effects of financing costs
associated with a project
B) Incremental net operating profits after-tax should include sunk costs associated
with a project
C) Incremental net operating profits after-tax should exclude the effects of
depreciation costs associated with a project
D) Incremental net operating profits after-tax should include the effects of financing
costs associated with a project - correct answer A)Incremental net operating profits
after-tax should exclude the effects of financing costs associated with a project
