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2024 CFA1 CI M5

Authored by Thanh Nguyễn

Financial Education

Professional Development

Used 10+ times

2024 CFA1 CI M5
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10 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which types of project is in "Business growth"?

Going concern projects

New lines of business and other

Regulatory projects

Compliance projects

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How many steps are there in Capital allocation process?

2

3

4

5

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which statement is true?

A sunk cost is one that has already been incurred

An incremental cash flow is the cash flow that include sunk cost

Cannibalization is a positive externality

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Project A and Project B are Mutually exclusive projects, so Corporate can decide to invest in...

A or B

Both A and B

Neither A nor B

There is no limitation

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which project is preferred?

NPV > 0

&
IRR > RRR

NPV > 0

&

IRR < RRR

NPV > 0

&

There are more than one IRR

NPV > IRR

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

If the projects are mutually exclusive, ... is strongly preferred?

IRR criterion
Payback period criterion
Accounting rate of return criterion
NPV criterion

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

If NPV is always preferred over IRR for selecting projects, why do companies even bother with IRRs?

Because IRR is a more accurate measure of a project's profitability
To provide a percentage return that can be easily compared to the cost of capital
Companies use IRR as a backup method in case NPV is inconclusive
To confuse investors and stakeholders with conflicting information

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