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1. When we calculate (a. NPV b. IRR c. MIRR d. PI), we input cash flows and initial cash outlay only. The required rate of return is used in making decisions, not in calculation. Which of the following does NOT consider the concept of time value of money? a. NPV b. IRR c. payback period d. PI e. MIRR 2. 3. Which of the followings bears lowest risk? a. US treasury bills b. Big company long term bonds c. Big company stocks d. small company stocks e. small company long term bonds 4. Systematic risk of each company is a. diversifiable. b. measured by beta in CAPM. c. asset specific d. defined by the risk free rate 5. In the calculation of Cash Flow From Assets (CFFA) via the indirect method in the capital budgeting, which of the followings reduces CFFA? a. Decrease in Net Working Capital b. Depreciation Expenses c. Increase in the Net Capital Spending d. Increase in the residual value of the assets. 6. In an efficient capital market a. Nobody can make profit in the markets b. Wrong doing in investment will not lead to a loss. c. The past history shows the capital markets were in the strong form efficiency d. The securities are fairly priced based on their corresponding risks e. There will be no surprise in the market. In capital budgeting, which of the measures represents the benefits to-cost ratio? (a. NPV b. IRR c. MIRR d. PI), 8. In capital budgeting, which of the measures can never be negative? (a. NPV b. IRR c. MIRR d. PI) You are reviewing a new project and have estimated the following cash flows: CF.92,330 Year 0: CF-170,000; Year 1: CF-64,120; Year 2: If the required rate of return is 12%, calculate IRRs ( ). CF#70,800; Year 3: i. 15.0 j. 16 % a, 25 b. 6c. 17 d. 8.7 f. 10.5 g, 11.8h. 12 e. 9.5 t is 10. Following the above question, the NPV of the project 30,000 f$40,000g $50,000 a. $9,410 b. $12,000 c. $15,000 d. $20000 e. 30. b. rejected c it cannot be decided. 11. Following No. 9. should the project be a. accepted

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