Take Test: Quiz 04 (Lecture 05) 49098-2017-AUTUMN-CITY https://online.uts.edu.au/webapps/assessment/take/launch.jsp?course_ass...

Applied Financial Management Autumn 2017 49098-2017-AUTUMN-CITY Quizzes

Take Test: Quiz 04 (Lecture 05)

Test Information
Description Quiz 04 is based on lecture 05 Capital Budgeting. There are 2 attempts only for
each quiz. Each attempt has a time limit of 1 hour. Each quiz has a weight of 2% of
the total mark. The quiz deadline is on Wednesday (19 April) at 5pm.

Instructions
Timed Test This test has a time limit of 1 hour.This test will save and submit automatically when
the time expires.
Warnings appear when half the time, 5 minutes, 1 minute, and 30 seconds
remain.
Multiple This test allows 2 attempts. This is attempt number 1.
Attempts
Force This test can be saved and resumed at any point until time has expired. The timer
Completion will continue to run if you leave the test.

QUESTION 1

Mark is going to invest $600 million in a new project that will generate $150 million at
the end of each year for the following five years. The weighted average cost of capital is
7% per annum.
Net present value (NPV) for this project is

-$120 million

$10.5 million

$15.03 million

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42 minutes,58 seconds.
Remaining Time:

Question Completion Status:

QUESTION 2

Mark is going to invest $600 million in a new project that will generate $150 million at
the end of each year for the following five years. The weighted average cost of capital is
7% per annum.
Shall Mark invest in this project?

Accept

Reject

Indifferent

Cannot be determined

QUESTION 3

Mark is going to invest $600 million in a new project that will generate $150 million at
the end of each year for the following five years. The weighted average cost of capital is
7% per annum.
Without calculations, internal rate of return (IRR) for this project is

Equal to 7%

Greater than 7%

Less than 7%

Cannot be determined

QUESTION 4

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42 minutes,58 seconds.
Remaining Time:

Question Completion Status:

Mark is going to invest $600 million in a new project that will generate $150 million at
the end of each year for the following five years. The weighted average cost of capital is
7% per annum.
Modified internal rate of return (MIRR) for this project is

3.33%

7.00%

7.53%

7.93%

QUESTION 5

Mark is going to invest $600 million in a new project that will generate $150 million at
the end of each year for the following five years. The weighted average cost of capital is
7% per annum.
Payback period (PBP) for this project is

3.00 years

4.00 years

4.86 years

5.00 years

QUESTION 6

Mark is going to invest $600 million in a new project that will generate $150 million at
the end of each year for the following five years. The weighted average cost of capital is
7% per annum.
Discounted payback period (DPBP) for this project is

3.00 years

4.00 years

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42 minutes,58 seconds.
Remaining Time:

Question Completion Status:

QUESTION 7

Mark is going to invest $600 million in a new project that will generate $150 million at
the end of each year for the following five years. The weighted average cost of capital is
7% per annum.
Profitability index (PI) for this project is
0.97

1.00

1.03

1.25

QUESTION 8

If NPV is positive, then IRR is WACC

Greater than

Less than

Equal to

None of the above

QUESTION 9

If NPV is positive, then MIRR is WACC

Greater than

Less than

Equal to

None of the above

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42 minutes,58 seconds.
Remaining Time:

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MIRR is IRR when NPV is positive.

Greater than

Less than

Equal to

None of the above

QUESTION 11

IRR is MIRR which is WACC when NPV is positive.

Greater than Greater than

Greater than Less than

Less than Greater than

Less than Less than

QUESTION 12

If NPV is positive, then PI is 1.

Greater than

Less than

Equal to

None of the above

QUESTION 13

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42 minutes,58 seconds.
Remaining Time:

Question Completion Status:

DPBP is always PBP.

Longer than

Shorter than

Equal to

None of the above

QUESTION 14

If NPV is negative, then IRR is WACC

Greater than

Less than

Equal to

None of the above

QUESTION 15

If NPV is negative, then MIRR is WACC

Greater than

Less than

Equal to

None of the above

QUESTION 16

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42 minutes,58 seconds.
Remaining Time:

Question Completion Status:

MIRR is IRR when NPV is negative.

Greater than

Less than

Equal to

None of the above

QUESTION 17

IRR is MIRR which is WACC when NPV is negative.

Greater than Greater than

Greater than Less than

Less than Greater than

Less than Less than

QUESTION 18

If NPV is negative, then PI is 1.

Greater than

Less than

Equal to

None of the above

QUESTION 19

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42 minutes,58 seconds.
Remaining Time:

Question Completion Status:

If NPV is zero, then IRR is WACC

Greater than

Less than

Equal to

None of the above

QUESTION 20

If NPV is zero, then MIRR is WACC

Greater than

Less than

Equal to

None of the above

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