Net Present Value and Learning Objective Number
Exam3 FIN370 Winter 2012 Key Version A
1. You are considering the following two mutually exclusive projects. The crossover point is _____ percent.
[pic]
A. 11.89
B. 13.75
C. 9.25
D. 12.08
E. 7.76
BLOOMS TAXONOMY QUESTION TYPE: APPLICATION
LEARNING OBJECTIVE NUMBER: 4
LEVEL OF DIFFICULTY: INTERMEDIATE
Ross - Chapter 008 #89
SECTION: 8.4
TOPIC: NPV PROFILE
TYPE: PROBLEMS
2. M&A, Inc. maintains a constant debt-equity ratio of .4. The firm had net income for the year of $140,000 and paid $98,000 in dividends. The firm has total assets of $700,000. What is the maximum sustainable growth rate of the firm given this information?
A. 6.38 percent
B. 9.17 percent
C. 16.28 percent
D. 24.38 percent
E. 18.62 percent
BLOOMS TAXONOMY QUESTION TYPE: ANALYSIS
LEARNING OBJECTIVE NUMBER: 3
LEVEL OF DIFFICULTY: INTERMEDIATE
Ross - Chapter 003 #103
SECTION: 3.4
TOPIC: SUSTAINABLE GROWTH RATE
TYPE: PROBLEMS
3. The future value of a series of cash flows over time can be computed by:
A. discounting each of the individual cash flows and summing the results.
B. summing the amount of each of the individual cash flows and multiplying the summation by (1 + r)t, where t equals the total number of cash flows.
C. computing the future value of the middle cash flow and multiplying that amount by the number of cash flows.
D. summing the future values of each of the individual cash flows.
E. multiplying each individual cash flow by (1 + rt) and summing the results.
BLOOMS TAXONOMY QUESTION TYPE: COMPREHENSION
LEARNING OBJECTIVE NUMBER: 1
LEVEL OF DIFFICULTY: BASIC
Ross - Chapter 005 #8
SECTION: 5.1
TOPIC: FUTURE VALUE
TYPE: CONCEPTS
4. Over the period of 1926-2006:
A. large-company stocks outperformed all other investment categories.
B. long-term government bonds underperformed long-term corporate bonds.
C. inflation exceeded the rate of return on U.S. Treasury bills.
D. small-company stocks
1. You are considering the following two mutually exclusive projects. The crossover point is _____ percent.
[pic]
A. 11.89
B. 13.75
C. 9.25
D. 12.08
E. 7.76
BLOOMS TAXONOMY QUESTION TYPE: APPLICATION
LEARNING OBJECTIVE NUMBER: 4
LEVEL OF DIFFICULTY: INTERMEDIATE
Ross - Chapter 008 #89
SECTION: 8.4
TOPIC: NPV PROFILE
TYPE: PROBLEMS
2. M&A, Inc. maintains a constant debt-equity ratio of .4. The firm had net income for the year of $140,000 and paid $98,000 in dividends. The firm has total assets of $700,000. What is the maximum sustainable growth rate of the firm given this information?
A. 6.38 percent
B. 9.17 percent
C. 16.28 percent
D. 24.38 percent
E. 18.62 percent
BLOOMS TAXONOMY QUESTION TYPE: ANALYSIS
LEARNING OBJECTIVE NUMBER: 3
LEVEL OF DIFFICULTY: INTERMEDIATE
Ross - Chapter 003 #103
SECTION: 3.4
TOPIC: SUSTAINABLE GROWTH RATE
TYPE: PROBLEMS
3. The future value of a series of cash flows over time can be computed by:
A. discounting each of the individual cash flows and summing the results.
B. summing the amount of each of the individual cash flows and multiplying the summation by (1 + r)t, where t equals the total number of cash flows.
C. computing the future value of the middle cash flow and multiplying that amount by the number of cash flows.
D. summing the future values of each of the individual cash flows.
E. multiplying each individual cash flow by (1 + rt) and summing the results.
BLOOMS TAXONOMY QUESTION TYPE: COMPREHENSION
LEARNING OBJECTIVE NUMBER: 1
LEVEL OF DIFFICULTY: BASIC
Ross - Chapter 005 #8
SECTION: 5.1
TOPIC: FUTURE VALUE
TYPE: CONCEPTS
4. Over the period of 1926-2006:
A. large-company stocks outperformed all other investment categories.
B. long-term government bonds underperformed long-term corporate bonds.
C. inflation exceeded the rate of return on U.S. Treasury bills.
D. small-company stocks