CFIN EXAM NEWEST 2024 ACTUAL EXAM TEST BANK COMPLETE QUESTIONS AND CORRECT DETAILED ANSWERS
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Module
CFIN
Institution
CFIN
CFIN EXAM NEWEST 2024 ACTUAL EXAM TEST BANK COMPLETE QUESTIONS AND CORRECT DETAILED ANSWERS
Which discounted cash flow technique matches the present value with the future value so that the net result is zero? - Answer-IRR (internal rate of return)
The ITC in capital budgeting analysis is
A. B...
CFIN EXAM NEWEST 2024
ACTUAL EXAM TEST BANK
COMPLETE QUESTIONS AND
CORRECT DETAILED ANSWERS
Which discounted cash flow technique matches the present value with the future value
so that the net result is zero? - Answer-IRR (internal rate of return)
The ITC in capital budgeting analysis is
A. Benefit
B. Cost
C. A&b - Answer-A. Benefit
The internal rate of return is the discount factor necessary to make an investments NPV
greater than one. - Answer-False
The payback method account for the time value of money. - Answer-False
Tax consequences of the capital gain on the sale of the old asset is
A. Cost
B. Benefit
C. Neither - Answer-A. Cost
In a capital budgeting analysis, taxes may be
A. Cost
B. Benefit
C. Both
D. Neither - Answer-C. Both
The present value index accounts for the present value of annual cash flows and the
initial investment. - Answer-True
Payback is often referred to as a break-even analysis. - Answer-True
In theory, the residual value is the present value of future cash flows beyond the time
horizon. - Answer-True
Capital budgeting includes brainstorming and continues through the analysis of the
investment after it has been brought on line. - Answer-True
, To Cali update yield to maturity of a bond you is which capital budgeting technique? -
Answer-IRR
If market interest rates fall, the market will place a discount on bonds which have
coupon rates that are higher than the market interest rate. - Answer-False
The cost of debt is the coupon rate of the bonds used to finance the debt. - Answer-
False
As price of a bond increases, coupon rate - Answer-Remains the same
The call price of a bond is also referred to as - Answer-The strike price
For WACC purposes, to calculate the cost of debt, you multiply the interest rate by (1-
tax rate). - Answer-True
Capital Asset Pricing Model (CAPM) relates the historical returns of that company to -
Answer-The market as a whole
As the price of a bond decreases, coupon rate - Answer-Remains the same
A firm may generate equity through
A. Earnings
B. Issuance of stock
C. Both
D. Neither - Answer-C. Both
The cost of equity can be calculated by more that one method. - Answer-True
Company A has unused production capacity and makes a product similar to Company
B. Company B acquires Company A to obtain the unused production capacity. This is
an example of - Answer-Horizontal integration
Book value is based on historical cost. - Answer-True
Which of the following items would have greatest impact on the book value of the firm?
A. Depreciation of the assets
B. Current value of the assets
C. Current value of the liabilities
D. None of the above - Answer-A. Depreciation of the assets
There is a difference between cash flow and operating cash flow. - Answer-True
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