fins1613 finals Essays

3912 Words Jun 13th, 2014 16 Pages
FAMILY NAME: ______________________________________
OTHER NAME(S): ______________________________________
STUDENT ID: ______________________________________
SIGNATURE: ______________________________________

PAPER ID: 00615
THE UNIVERSITY OF NEW SOUTH WALES
AUSTRALIAN SCHOOL OF BUSINESS
SCHOOL OF BANKING AND FINANCE
FINS1613: BUSINESS FINANCE
SEMESTER 1 2012
FINAL EXAM
1. TIME ALLOWED – 3 hours
2. THIS EXAMINATION PAPER HAS 19 PAGES
3. TOTAL NUMBER OF QUESTIONS – 45 Multiple Choice
4. TOTAL MARKS AVAILABLE – 45
5. MULTIPLE CHOICE QUESTIONS ARE 1 (ONE) MARK PER QUESTION.
6. THE EXAMINATION PAPER HAS 1 PART.
a. You must complete a Generalised Answer Sheet for this exam
b. Complete the top portion of the generalized answer
…show more content…
What most be the value of a similar perpetuity if the first payment is instead due in sixteen years.
a.

$1,285.45

b.

$3,118.74

c.

$881.45

d.

$3,290.27

e.

Not enough information

11. The Net Present Value decision rule states that a company should invest in __________.
When a company can borrow and lend at competitive market rates, following the NPV decision rule ensures that accepting a project is equivalent to __________.
a.

any positive NPV project, receiving the NPV as a cash flow today

b.

only projects above a minimum NPV threshold, receiving the NPV as a cash flow today c.

any positive NPV project, receiving the future cash flows discounted at the riskfree rate

d.

only projects above a minimum NPV threshold, receiving the future cash flows discounted at the risk-free rate

e.

none of the above

12. A major disadvantage of the payback period methodology is:
a.

It is useless as an indicator of risk

b.

It ignores any cash flows (in or out) that occur after the initial outlay has been repaid c.

Statements b and c are correct

e.

It does not take into account the time value of money

d.

Statements a, b and c are all correct

5 of 19

13. NDR is a company that is deciding between three projects, High, Medium, and Low.
The projects have internal rate of returns (IRR)

Related Documents