SAMPLE TEST QUESTIONS
Chapters 3 and 4
1) A project that you are considering today is expected to provide benefits worth $168,000 in
one year. If the risk-free rate of interest (rf) is 4.5%, then the value of the benefits of this project
today are closest
SAMPLE QUESTIONS
Chapters 10 and 11
Consider the following probability distribution of returns for Alpha Corporation:
Current Stock Stock Price in One
Price ($)
Year ($)
$35
$25
$25
$20
Return R
40%
0%
-20%
Probability PR
25%
50%
25%
1) The expected retur
SAMPLE QUESTIONS
Chapters 12, 14, 15 and 16
1) Assume that you have $100,000 to invest and you are interested in creating a value-weighted
portfolio of these four stocks. The percentage of the shares outstanding of Boeing that you
would hold in your portf
SAMPLE TEST CHAPTERS 17, 23, 28
Wyatt Oil has assets with a market value of $600 million, $70 million of which are cash. It has
debt of $250 million, and 20 million shares outstanding. Assume perfect capital markets.
1) Wyatt Oil's current stock price is
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TABLE 2.4
Proﬁtability Ratios
Gross Margin
Operating Margin
EBIT Margin
Net Profit Margin
Liquidity Ratios
Current Ratio
Quick Ratio
Cash Ratio
Working Capital Ratios
Accounts
Receivable Days
Accounts Payable
Days
Inventory Days
Accoun ts
Receivable
Turno
SAMPLE TEST CHAPTERS 7 & 8
You are considering investing in a start up project at a cost of $100,000. You expect the project
to return $500,000 to you in seven years. Given the risk of this project, your cost of capital is
20%.
1) The NPV for this project