兹维博迪金融学第二版试题库6TB(1)
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Chapter Six
The Analysis of Investment Projects
This chapter contains 41 multiple choice problems, 20 short problems and 8 longer problems.
Multiple Choice
1.The objective of a firm's management is to only undertake the projects that ________ the
market value of shareholders' equity.
a)decrease
b)do not decrease
c)change
d)do not change
Answer: (b)
2.The decision rule that management uses with the net present value is to undertake only those
projects with ________ NPV.
a) a discounted
b) a contingent
c) a positive
d)negative
Answer: (c)
3.If a firm decides to invest in automated machines that will allow the firm to reduce labor
costs, this is an example of a ________ capital expenditures project.
a)new products
b)replacement of existing assets
c)cost reduction
d)advertising
Answer: (c)
4.The NPV of a project represents the amount by which it is expected to increase ________.
a)the break-even point
b)capital budgeting
c)capital expenditures
d)shareholder wealth
Answer: (d)
5.Consider the following annual cash flows:
Year Cash Flows (in thousands of dollars)
0 –2,000
1 1,200
2 1,500
3 1,800
Using a cost of capital of 15%, compute this project's NPV.
a)$5,361,000
b)$3,548,000
c)$3,361,000
d)$1,361,000
Answer: (d)
6.Consider the following annual cash flows:
Year Cash Flows (in thousands of dollars)
0 –5,000
1 4,100
2 3,800
3 3,500
Using a cost of capital of 12%, compute this project's NPV.
a)$14,181,000
b)$9,181,000
c)$4,181,000
d)$3,548,000
Answer: (c)
7. A negative sign in front of a cash-flow forecast for a particular year means that it is an
________.
a)inflow
b)outflow
c)indeterminate flow
d)more information is required to make this determination
Answer: (b)
cash inflows from operations can be computed in which of the following ways?
a)Cash Flow = Revenue – Cash Expenses – Taxes
b)Cash Flow = Net Income + Noncash Expenses
c)Cash Flow = Revenue – Total Expenses – Taxes + Noncash Expenses
d)all of the above
Answer: (d)
9.Consider the development of a new type of laptop machine. In your estimates you determine
that you will sell 5,000 laptop units per year at a price of $2,500 per laptop. Production
equipment will have to be purchased at a cost of $2 million. The equipment will be
depreciated over five years using the straight-line method. Net working capital of $1.9
million will also required to finance this project. The cash expenses for this project are $1,700 per laptop. The tax rate is 40%. Compute the net cash inflows from operations.
a)$4 million
b)$2.56 million
c)$2.16 million
d)$1.76 million
Answer: (b)
10.Refer to question 9. What is the annual depreciation amount for this project?
a)$4 million
b)$1 million
c)$0.78 million
d)$0.4 million
Answer: (d)
11.Refer to question 9. If we use a cost of capital equal to 13%, what is the NPV for this project?
a)$2.3 million
b)$3.7 million
c)$5.1 million
d)$9 million
Answer: (c)