Quizathon 2.0 - Level 2

Calculate the NPV of a project requiring an initial outlay of $10,000, with cash inflows of $3,000/year for 5 years at an 8% discount rate.

• $1,162.62

• $1,000.00

• $3,500.86

• $1,000.00

Which components are typically included in the calculation of WACC?

• Cost of equity, debt, and preferred stock.

• Only cost of equity.

• Only cost of debt.

• Both the cost of equity and the cost of debt.

What does a high Sharpe ratio indicate about a portfolio?

• High risk-adjusted return.

• High volatility.

• High diversification.

• Low risk-free rate.

Why might an analyst use ROIC instead of ROE?

• Firms have differing capital structures.

• Firms are in different industries.

• Firms operate in different countries.

• Firms operate in different countries.

Which balance sheet assets are most affected if units sold decrease by 5%?

• Accounts receivable and inventory.

• Accounts receivable, inventory, and prepayments.

• Accounts receivable and prepayments.

• Accounts receivable and prepayments.

Most appropriate measure for assessing interest rate risk of a callable bond?

• Effective Duration.

• Macaulay Duration.

• Modified Duration.

• None of the above

Equity shares sell at Rs. 60, dividend Rs. 3, growth rate 8%. Rate of return?

• 13%

• 12%

• 14%

• 15%

Enterprise Value for Market Cap = 10L, Debt = 3L, Cash = 4L?

• 9L

• 11L

• 13L

• 6L

Return on equity if P/E = 10, P/B = 5, BV/share Rs. 15, shares = 10,000?

• 50%

• 25%

• 75%

• 20%

Found in an income statement?

• None of the above.

• Accounts Receivable.

• Long Term Debt.

• Inventory.