WorksheetsQuizz 1 FAD
Total questions: 10
Worksheet time: 10mins
The investment decision is a decision regarding:
Short Term
Long Term
The investment cycle involves the acquisition and use of fixed assets necessary for the development of the company's activities.
True
False
.........................................aims to increase productivity by introducing modern and advanced equipment.
Renewal investment
Investment in modernization
Replacement investment
The present value (PV) corresponds to:
The sum of the cash flows generated by an asset, discounted at the discount rate
The creation or destruction of value that the realization of an investment can entail
none of these answers
Is the NPV the best criterion for investment choice?
True
False
Not enough information to answer
Net present value (NPV):
Cannot be negative
Is a relevant criterion for choosing between several projects with different initial costs
Decreases when the discount rate increases
None of the above
An investment project is characterized by an NPV = -2.4384
This project is considered:
Profitable
Non-profitable
None of the above
Knowing that the net present value of a project is NPV = -2.4384 and its PI = 0.987808,
What would be its initial investment I0:
I0 = 200,000 TND
I0 = 400,000 TND
None of the above
A company wants to invest in a machine that costs 20,000 TND. Its estimated lifespan is 5 years. According to forecasts for this investment, the company would incur a gross result of -10,000 TND in the first year and would be taxed at a rate of 15%.
What would be the value of its first cash flow (CF)?
6,000 TND
10,000 TND
-6,000 TND
None of the above
A company plans to invest in an industrial machine to be imported from China.
Its price is 100,000 TND. Customs fees amount to 12,500 TND, and transportation costs are 5,000 TND.
A Chinese engineer had to travel to provide training to the technicians responsible for the new machine. He will be paid 22,500 TND, including travel expenses.
This investment is expected to have net cash flows over its lifespan as follows:
Year 1: Discounted cash flow = 53,000 TND
Year 2: Discounted cash flow = 68,000 TND
Year 3: Discounted cash flow = 47,000 TND
The NPV of this investment is 28,000 TND and its PI is 1.2, so it is profitable.
The NPV of this investment is -28,000 TND and its PI is 0.83, so it is profitable.
The NPV of this investment is -28,000 TND and its PI is 0.83, so it is not profitable.
None of the above
