fins1613 finals Essays
OTHER NAME(S): ______________________________________
STUDENT ID: ______________________________________
PAPER ID: 00615
THE UNIVERSITY OF NEW SOUTH WALES
AUSTRALIAN SCHOOL OF BUSINESS
SCHOOL OF BANKING AND FINANCE
FINS1613: BUSINESS FINANCE
SEMESTER 1 2012
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…
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 __________.
any positive NPV project, receiving the NPV as a cash flow today
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
only projects above a minimum NPV threshold, receiving the future cash flows discounted at the risk-free rate
none of the above
12. A major disadvantage of the payback period methodology is:
It is useless as an indicator of risk
It ignores any cash flows (in or out) that occur after the initial outlay has been repaid c.
Statements b and c are correct
It does not take into account the time value of money
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)