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Group 8

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Group 8
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10 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Media Image

How many evaluation criteria are there for investment projects?

5

6

7

8

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

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Which of the following is NOT one of the advantages of payback periods?

  1. Need detailed analysis.

  1. Simple to calculate and understand.

  1. Adjusts for uncertainty of later cash flows.

  1. Biased towards liquidity.

3.

MULTIPLE CHOICE QUESTION

45 sec • 3 pts

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The developer indicates that net operating income will be $2,150,000 per year, and the lender notes that debt service will be $350,000 per year. The DSCR is:

  1. 6.14

5.14

6.3

0.16

4.

MULTIPLE CHOICE QUESTION

45 sec • 3 pts

Media Image

A business is considering a project that has an initial investment of $250,000 and forecasts it would generate revenue of $70,000 per year. The ARR is:

30%

28%

3.57

4.2

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The debt-service coverage ratio (DSCR) is a measure of the cash flow available to pay current debt obligations.

FALSE

TRUE

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the definition of IRR?

The net monetary  gain (or loss)  from  a  project, computed  by  discounting all present and future cash inflows and outflows related to the project.

A series of cash flows of equal amounts in  each period of the  total planning period.

  1. The rate that leads to a NPV of zero when applied as the uniform discount rate.

  1. The  period  after  which  the  capital  invested  has  been recovered by the discounted net cash inflows from the project.

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following is correct about BCR (benefit-cost analysis)?

  1. BCR indicates the project’s size or provides a specific value on what the asset / project will generate.

  1. BCR exceeding one indicates that the asset / project is expected to generate incremental value.

  1. BCR equal 1 indicates that the project is destroying value and should not be undertaken.

  1. BCR = PV of benefit expected from the project * PV of the cost of the project

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