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Discipline of Finance
FINC 2011 CORPORATE FINANCE 1
Early Semester Quiz
Example 2
Time Allowed:
40 minutes
Format:
A total of 20 multiple choice questions
each worth one (1) mark
This exam constitutes 15% of your overall grave
Instructions
:
Fill in the circle for the
most correct
answer on the answer sheet provided.
Use pencil only.
Authorised Material:
1. Nonprogrammable calculator
2. Pencil
3. Eraser
4. Pencil Sharpener
5. Student ID Card
NO PART OF THIS PAPER IS TO BE REMOVED FROM THE EXAMINATION ROOM
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1.
What are the three main decisions corporate managers must make to realise the corporate objective?
a)
Investment decision, financing decision, and dividend decision
b)
Investment decision, financing decision, and wealth decision
c)
Investment decision, wealth decision, and dividend decision
d)
Wealth decision, financing decision, and dividend decision
e)
None of the above
2.
A share in a publicly listed firm is an example of:
a)
A Real Asset
b)
A Financial Asset
c)
A Cash outlay
d)
An opportunity cost
e)
None of the above
3.
Suppose you need $55,000 to pay for university in five years time. Approximately how much must
invest now, at an annual rate of 10%, compounded quarterly, to have enough for tuition (round to the
nearest dollar):
a)
3132
b)
2007
c)
33565
d)
32496
e)
None of the above
4.
You decide to deposit $1,000 to a bank account at the end of every year for the next 5 years. The
account pays 7.5% interest, compounded annually. In five years time your investment will be worth
approximately:
a)
5808
b)
5375
c)
4046
d)
5000
e)
None of the above
5.
Suppose you take out a loan today and have to pay back the loan by making 7 annual payments,
starting one year from today. If your payments are $432.00, and the interest rate is 5.6%, you must
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 Three '11
 ElivisJarnecic
 Time Value Of Money, Interest, Net Present Value, regularly occurring cash, CMM Investments

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