WorksheetsQuizz 2 FAD
Total questions: 10
Worksheet time: 10mins
Net cash flow is equal to:
Net income + non-cash expenses
Net income + cash expenses
Net income - taxes + non-cash expenses
None of the above
The Net Present Value (NPV) represents the difference between:
The initial cost of the investment and the present value of the cash flows generated by that investment.
The initial price of the investment and the present value of the cash flows generated by that financing.
The initial cost of financing and the acquired value of the cash flows generated by that investment.
None of the above.
The profitability index is the ratio between:
The ratio of the discounted cumulative cash flows and the invested capital
The invested capital to the sum of cash flows
The ratio between the invested capital and the NPV
None of the above
Investments made by companies:
Correspond to tangible, intangible, and financial assets
Are solely material
Are made in the short term
Operating and investment cycles lead to identical financing needs
True
False
Is it easier to create value...?
In the choice of financing
In the choice of investment
In general, high-risk investments are investments..................................
strategic and modernization
of capacity and renewal
of capacity, innovation
or strategic
renewal or modernization investments
Let's take two projects A and B. The NPV of A is 125, while that of B is 150. The PI of A is 1.5, and that of B is 1.25.
We choose project A.
We choose project B.
We cannot choose
A company wants to invest in a machine that costs 20,000 DT. Its estimated lifespan is 5 years. According to the forecasts related to this investment, the company would incur a gross result of –10,000 DT in the first year, and it would be taxed at a rate of 15%.
What would be the value of its first cash flow (CFN)?
-10,000 D
6,000 D
-6,000 D
None of the above
Consider an investment project with the following discounted cash flows (CFN):
Year 1: Discounted CFN = 21,000 DT
Year 2: Discounted CFN = 32,000 DT
Year 3: Discounted CFN = 15,000 DT
Given that its NPV is 18,000 DT:
The invested capital is 86,000 DT.
The project's profitability index (PI) is 0.264.
The project's PI is 1.36.
We cannot calculate the project's PI.
