1.78 - CORRECT ANSWER: 3.57

CFI FMVA Corporate Finance Final Exam Latest Update - Actual Exam with 170 Questions and 100% Verified Correct Answers Guaranteed A+ Approved by the Professor

#1: which project should be chosen using payback period? NPV?

Payback = A and B. NPV = A and B.Payback = B. NPV = B.Payback = A. NPV = A.

Payback = A. NPV = B. - CORRECT ANSWER: Payback = A. NPV = B.

#3: What is the payback period when the initial cost is $16k?

2.69 4.26 Correct! 3.57

1.78 - CORRECT ANSWER: 3.57

#5 - What is the IRR? Should you accept?

11.80%. Reject.

21.80%. Reject.

11.80%. Accept.

21.80%. Accept. - CORRECT ANSWER: 21.80%. Accept.

#5 - What is the IRR? Should you accept?Correct! 21.80%. Accept. 1 / 4

21.80%. Reject.

11.80%. Accept.

11.80%. Reject. - CORRECT ANSWER: Correct! 21.80%. Accept.

4a) Firm reinvests cash in the Firm's Operations 4b) Firm pays out cash to investors Payout Decision - how should the Firm divide up operating cash flows into cash distributed to investors and cash reinvested in the firm's operations and assets

Is this a cash inflow or outflow?

Cash Outflow Cash Inflow Both

Depends - CORRECT ANSWER: Depends

4a) Firm reinvests cash in the Firm's Operations 4b) Firm pays out cash to investors Payout Decision - how should the Firm divide up operating cash flows into cash distributed to investors and cash reinvested in the firm's operations and assets

Is this a cash inflow or outflow?

Cash Outflow Cash Outflow or Neither Cash Inflow

Both - CORRECT ANSWER: Cash Outflow or Neither

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After calculating our cash flows, based on our 2020 projection, what are we assuming that Intuit did with their Free Cash Flow?

Paid it all out to bondholders and shareholders

We still do not know because I have no idea how to do the cash flow calculations

Added all of it to their balance sheet except for the interest they had to pay

Added all of it to their balance sheet - CORRECT ANSWER: Added all of it to their balance sheet except for the interest they had to pay

After calculating our cash flows, what is the best way to calculate the 2020 Cash and Equivalents?

Keep hardcoded plug

2019 Cash and Equivalents + Free Cash Flow

2019 Cash and Equivalents + Free Cash Flow - Cash Outflow to Creditors - Cash Outflow to Shareholders

2019 Cash and Equivalents + Cash Inflow from Assets - CORRECT ANSWER: 2019

Cash and Equivalents + Free Cash Flow - Cash Outflow to Creditors - Cash Outflow to Shareholders

All else equal, what does decreasing the discount rate do to Discounted Payback Period?

Increases Changes the Decision 3 / 4

No effect

Decreases - CORRECT ANSWER: Decreases

All else equal, what does decreasing the discount rate do to Payback Period?

Decreases Changes the Decision No effect

Increases - CORRECT ANSWER: No effect

All else equal, what does increasing the discount rate do to Discounted Payback Period?

Nothing Increases Decreases

Everything - CORRECT ANSWER: Increases

All else equal, which of the following changes would NOT definitely increase or decrease the after-tax salvage value? In other words, which would you need additional information to know for sure if it would increase or decrease the after-tax salvage value?

Higher sale price Decrease Tax Rate Lower initial investment

More depreciation - CORRECT ANSWER: Lower initial investment

Assume depreciation and amortization of $783mm and that this figure is included in the cost of goods sold. What does this tell us?

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