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MBA6040 MANAGERIAL FINANCE FINAL EXAM REVIEW QUESTIONS; best final exam prep questions on managerial finance; well equipped with the best solutions and explanations
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Course
MBA6040
Institution
MBA6040
Book
Managerial Finance
This document contains a managerial finance model examination with final exam review questions and answers. It tests knowledge on various managerial finance topics
MBA6040 MANAGERIAL FINANCE QUIZ 1 WITH SOLUTIONS; graded A+ latest model examinations on managerial finance with 100% correct solutions.
MBA6040 MANAGERIAL FINANCE EXAM QUESTIONS WITH COMPLETE SOLUTIONS; latest model exam prep questions with 100% complete solutions.
MBA6040 MANAGERIAL FINANCE EXAM PREP WITH SOLUTIONS; latest model examination prep questions with 100% correct and verified solutions.
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MBA6040 MANAGERIAL FINANCE
FINAL EXAM REVIEW QUESTIONS WITH
CORRECT ANSWERS
Ch 8 MC
Rule of IRR
define
and decision rule - Internal Rate of Return
-independent of interest rates
(a) discount rate that forces PV of cash flows equal to cost
(b) PV of CF's = cost --> NPV = 0
-IRR = discount rate that makes the NPV= 0
Decision Rule: Accept project if the IRR > Required Return
Ch 8 MC pt(1)
non-conventional cashflows - -cash flow sign changes more than once
-initial cost (negative CF), stream of positive cfs, negative CF to close project.
-Nuclear power plant or strip.
ch 8 pt (2)
mutually exclusive projects - -initial investments are substantially different
-timing of cash flows is substantially different
-will not reliably rank projects
-acceptance of one project precludes accepting the other
Ch 10 MC: quiz 5 #3 & 4
understand the historical record of rates of returns on five types of financial investments
- Return Risk Premium
Large Stocks. 12.1% 12.1-3.5= 8.6
Small Stocks. 16.7% 16.7- 3.5 = 13.2
L/T Gov Bond. 6.4%. 6.4- 3.5= 2.9
U.S T Bill 3.5% 3.5- 3.5 = 0
Ch 10 MC: quiz 5
Understand risk premium - risky assets, on average, earn a risk premium
-there is a reward for breaking risks
Ra = Rf + Risk Premium
Return on Asset = Risk free rate + risk premium
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