Capital Budgeting: Mid-Term Exam Guideline (Fall 2012-1213)

Questi n T!pe Multiple C# i$e Questi ns

(Multiple Choice Questions. Encircle the letter of the single best answer)

" ints 1%x1 & 1% p ints

C#apters C#apter ': (et "resent )alue Basic concepts, simple and compound interest rates, annuities, growing annuities, perpetuities, inflation, real rate of return, multiple cash flows, effective interest rate, nominal interest rate, multiple compounding period, decision making using TMV concepts etc. C#apter *: + me ,lternati-e .n-estment /ules NPV, payback period, discounted payback period, average accounting return, internal rate of return, profitability inde ! "efinition, estimation, decision rules, advantages and disadvantages. #ssues related with #$$, how to address those issues, mutually e clusive and independent pro%ects etc. C#apter 0: (") and Capital Budgeting #ncremental cash flows, relevant cash flows for capital budgeting decisions, cash flows vs. accounting profit, estimating cash flows, inflation and capital budgeting, real vs. nominal rate of return, investment with une&ual lives etc.
C#apter End "r 3lems: /a-i +#u4la TMV Problems! 'olve ()) TVM *verview and Practice problems. C#apter ': Te t book e amples, + ercises ,.-, ,.., ,./0, ,.//, ,./,, ,./1, ,.2/, ,.22, ,.23, ,.21, ,.4/, ,.44, ,.45, ,.41, ,.,- and similar problems.

M di1ied True2False
Agree or disagree with the following statements (please first write Agree / Disagree). You must correct the underlined statement if you disagree.

%x1 & % p ints

"r 3lem + l-ing

(Please solve any three out of four questions)

3x10 & 30 p ints

C#apter *: + ercises 3./ 6 3./0, 3./4, 3./,, 3./5, 3./-, 3./1, 3.23 and similar problems. C#apter 0: + ercises -.4, -.,, -.3, -.2/, -.40, -.41, -.,0 and similar problems.
'hort notes on 7apital Budgeting Techni&ues.

T tal

%0 p ints

2 5 urs Exam

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