Corporate Finance Exam Mba Essay

3200 Words Nov 2nd, 2011 13 Pages
User | Long Yang | Submitted | 9/8/11 6:45 PM | Name | Midterm Exam I | Status | Completed | Score | 69 out of 75 points | Time Elapsed | 3 hours, 28 minutes, and 53 seconds out of 3 hours and 30 minutes allowed. | Instructions | Good luck! | | * Question 1
1 out of 1 points | | | Both New York Stock Exchange and NASDAQ are examples of secondary markets.Answer | | | | | Selected Answer: | True | Correct Answer: | True | | | | | * Question 2
1 out of 1 points | | | Financial manger can create value for a firm by creating more cash flow for it than it uses. To do so, they should make investment decisions so that the firm may buy assets that generate more cash than they cost.Answer | |
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e increases as the required rate of return (= R) increases.Answer | | | | | Selected Answer: | False | Correct Answer: | False | | | | | * Question 15
1 out of 1 points | | | When we have two mutually exclusive projects, if NPV and IRR lead to inconsistent rankings, we should follow the IRR rule.Answer | | | | | Selected Answer: | False | Correct Answer: | False | | | | | * Question 16
0 out of 1 points | | | The depreciation tax shield is calculated by (1-T) * Depreciation, where T is the firm's marginal tax rate.Answer | | | | | Selected Answer: | True | Correct Answer: | False | | | | | * Question 17
1 out of 1 points | | | An increase in NWC is treated as a cash inflow in capital budgeting cash flow estimation.Answer | | | | | Selected Answer: | False | Correct Answer: | False | | | | | * Question 18
1 out of 1 points | | | In capital budgeting cash flow estimation, sunk costs should not be included.Answer | | | | | Selected Answer: | True | Correct Answer: | True | | | | | * Question 19
0 out of 1 points | | | A firm using MACRS accelerated depreciation will be less likely to accept a given project using either NPV or IRR evaluation than a firm using the optional straight line alternative, other things being equal.Answer | | | | | Selected Answer: | True | Correct Answer: | False | | | | | * Question 20
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