Busıness Fınance II (ENG) — Ünite Sınavı

1. Estimating cash flow
2. Adding up the discounted cash flows to obtain NPV
3. Discounting cash flows by an appropriate discount rate
4. Projecting the risk differences of different projects

Which of the following are the steps of calculating net present value?

1. Managers have to realize and distinguish which variables are relevant to a particular project’s cash flow estimation, and which are not.
2. Only information which is relevant to the project’s analysis is used in developing forecasts.
3. Incremental cash flow refers to a change in a firm’s net cash flow attributable to an investment project.
4. Incremental cash flows occur as a direct result of accepting the project, and should be included in the evaluation.
5. Incremental cash flows may occur at the start of the project, may continue during the project, or may occur at the end of the project.

Which of the statements above related to incremental cash flow are correct?

Which of the following are the type of projects in which selecting one project prevents other projects from being undertaken?

Which of the following term refers to a firm’s attribute that may allow the firm to generate economic profits?

Positive economic profits (or positive net present value projects) can stem from two sources: 1) ...... , 2) creating competitive advantage.

Which of the following completes the sentence above?