1613-past-paper - FINS 1613 Final Exam S1 2006 1 Student...

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Unformatted text preview: FINS 1613 Final Exam S1 2006 1 Student Name: Student ID Number: THE UNIVERSITY OF NEW SOUTH WALES JUNE / JULY 2006 FINS1613 Business Finance – Final Exam (1) TIME ALLOWED - 2 hours (2) TOTAL NUMBER OF QUESTIONS - 50 (3) ANSWER ALL QUESTIONS (4) ALL QUESTIONS ARE OF EQUAL VALUE. (5) THIS PAPER MAY NOT BE RETAINED BY CANDIDATE (6) CANDIDATES MAY BRING A PENCIL AND ERASER TO THE EXAMINATION. CANDIDATES MAY NOT BRING THEIR OWN CALCULATORS (7) THE FOLLOWING MATERIALS WILL BE PROVIDED BY THE EXAMINATIONS SECTION: Calculators, and Mathematical tables (PV and FV) PRINT YOUR STUDENT NUMBER ON TOP RIGHT HAND CORNER ANSWER ALL QUESTION ON THE PROVIDED ANSWER SHEET ALL ANSWERS MUST BE ANSWERED IN PENCIL. FINS 1613 Final Exam S1 2006 2 Multiple Choice - 50 Questions: 1 mark each No negative marking 1) Hiphop Limited must choose between one of two mutually exclusive projects. ! Project A has an up-front cost (t = 0) of $120,000, and it is expected to produce cash inflows of $80,000 per year at the end of each of the next two years. Two years from now, the project can be repeated at a higher up-front cost of $125,000, but the cash inflows will remain the same. ! Project B has an up-front cost of $100,000, and it is expected to produce cash inflows of $41,000 per year at the end of each of the next four years. Project B cannot be repeated. Both projects have a cost of capital of 10 percent. Hiphop wants to select the project that provides the most value over the next four years. What is the net present value (NPV) of the project that creates the most value for the company? a) $34,425 b) $30,283 c) $29,964 d) $29,240 e) $24,537 2) Which of the following statements is most correct? a) Corporations generally face fewer regulations than sole proprietorships do. b) Corporate shareholders have unlimited liability. c) It is usually easier to transfer ownership in a corporation than it is to transfer ownership in a sole proprietorship. d) All of the above statements are correct. e) None of the above statements is correct. FINS 1613 Final Exam S1 2006 2 Multiple Choice - 50 Questions: 1 mark each No negative marking 1) Hiphop Limited must choose between one of two mutually exclusive projects. ! Project A has an up-front cost (t = 0) of $120,000, and it is expected to produce cash inflows of $80,000 per year at the end of each of the next two years. Two years from now, the project can be repeated at a higher up-front cost of $125,000, but the cash inflows will remain the same. ! Project B has an up-front cost of $100,000, and it is expected to produce cash inflows of $41,000 per year at the end of each of the next four years. Project B cannot be repeated. Both projects have a cost of capital of 10 percent....
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This note was uploaded on 09/23/2011 for the course FINS 1613 taught by Professor Drkhshim during the One '10 term at University of New South Wales.

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1613-past-paper - FINS 1613 Final Exam S1 2006 1 Student...

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