Ünite Sınavı Soruları

Which one of the following tells the length of time it takes cumulative present values of cash inflows will be equal to the initial cash outflow?

Which of the following term refers to all kinds of spendings made for acquiring, sustaining, and increasing production factors?

Which of the following refers to the outlay of funds by the firm that is expected to produce benefits over a period of time longer than one year?

1. Capital budgeting activity is explained as a process consisting three basic steps.by Megginson et al.
2. These steps are “Identifying potential investments”, “Analyzing the set of investment opportunities, isolating those that will create shareholder value, and prioritizing them if necessary” and “Implementing and monitoring the investment projects selected”.
3. If management does not spend enough effort to identify good investments, it will be pointless to analyze and prioritize projects because the outcome will not provide enough return regardless of the project evaluation techniques used.
4. If management does not work enough on controlling and monitoring the projects, all money, time and effort spent on project evaluation will be wasted because without good monitoring, a project cannot sustain generating cash flows as expected in the first place.

Which of the statements above related to capital budgeting activity are correct?

Which of the following is the effect of the present value of the delayed capital expenditure of future cost savings in real options?

1. Profitability risks
2. Market risks
3. Within-firm risks
4. Stand-alone risks

Which of the above are the kinds of risk sources of an investment project?

1. Investment of any kind is made with the intention of gaining returns over the money, time, and effort spent for making the investment.
2. Investment consists all kinds of spendings made for acquiring, sustaining, and increasing production factors.
3. If a financial manager approves any investment to be made, we can assume that he/she thinks that benefits/returns will be more than the costs/risks.
4. Decisions about operating expenditures from which benefits are expected to be received within a year are easier to make than the decisions about capital expenditures from which benefits are expected to be received over a period of time, longer than one year.

Which of the statements above related to investment are correct?

Which of the follwoing statements about discounted payback period is FALSE?

Which of the following is not a capital investment project analysis technique?

1. It is easy to apply and easy to explain to non-financial personnel;
2. It focuses on cash flow, not accounting-based measures such as profit;
3. It accounts for the time value of money;
4. It adjusts for differences in risk across projects
5. It leads to higher firm value in any company (and higher stock prices in public firms)

What are the characteristics of an analytical tool which managers need to decide which investments to undertake?

... refers to the process of evaluating and selecting long-term investments which are consistent with the firm’s main objective of maximizing shareholders’ wealth.

Which one of the following completes the sentence?

What is capital expenditure?

1. Internal rate of return technique finds the rate of return that causes the net present value of a project to be zero.
2. Internal rate of return technique assumes that all investment projects have the same level of risk.
3. If a project is independent, approve the project(s) that provides internal rate of return that is greater than the expected rate of return (discount rate used in net present value technique).
4. If a project is mutually exclusive, choose the project that provides the highest internal rate of return (that is greater than the expected rate of return (discount rate used in net present value technique)).

Which of the statements above related to internal rate of return technique are correct?

1. In order to position the capital budgeting in business finance, it is essential to identify the relationships between capital budgeting, cost of capital, and capital structure.
2. A financial manager should consider a number of factors indicating whether a capital investment project has a positive effect on the firm value or not.
3. One of the most important factors is the cost of capital because it determines how capital investment projects will be financed, and how capital structure will be changed.
4. The cost of capital is used as a kind of measure or reference point to make an investment decision.
5. Expected rate of return from a capital investment project should at least be equal to the cost of capital.
6. If the cost of capital used in the evaluation is calculated wrong, then a financial manager may approve projects that should be rejected (overinvest), or may reject projects that should be approved (underinvest).

Which of the statements above related to capital budgeting are correct?

Whic one of the following tells the ratio of the present value of a project’s cash inflows to the present value of all cash outflows or initial cash outflow?

Which of the following technique is used to find the rate of return that causes the net present value of a project to be zero?

Which of the following options provide withdrawal of resources from a project failing to live up to short-run expectations?

In terms of a real option, uncertainty of the project’s cash flows plays the same role as:

A company decides to build houses and roads before building a factory in a remote area. Which of the following investment type explains the situation?

What does the sum of present value of all cash inflaws and cash outflows of a project over its life show?