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Liberty University Busi435 Feasibility Analysis

Question
	
You will write an 8-page minimum Feasibility Analysis for a
business that you would like to study or consider creating. The goal is to
understand if there is a market for the product or service before additional
resources are expended. Assuming a market niche is found, this analysis will be
foundational to building the business plan. You should have a minimum of 10
outside sources and the paper should be written in APA format. For more
information, read Scarborough: ch. 4, which outlines each category that should
be addressed.
Feasibility Analysis
Instructions



Purpose

The feasibility analysis helps the
entrepreneur determine if his/her idea can be a viable business or not. The
process can help the entrepreneur save time and money creating a business plan
if the business is not viable. If the business is viable, the entrepreneur can
proceed to the Business Plan phase with more knowledge and confidence.



Formatting

The Feasibility Analysis must be a
minimum of 8 pages, not including the cover page, business description or
reference page. It will be written in APA format and will have a minimum of 10
trusted references (i.e. scholarly journals, trade journals, government
documents, etc.) beyond the text. Be careful of various internet sites due to
their propensity for factual errors. The paper should be in 12-point Times New Roman
font, double-spaced with 1-inch margins.



Instructions

The Feasibility Analysis includes the
following:

1.
Cover page

2.
Proposed Business Description

3.
Industry and Market Feasibility Analysis
– See Scarborough: Chapter 4 for an in-depth description. Be sure to include
all of the pertinent sub-topics for your proposed business.

4.
Product or Service Feasibility Analysis
– See Scarborough: Chapter 4 for an in-depth description. Be sure to include
all of the pertinent sub-topics for your proposed business.

5.
Financial Feasibility Analysis – See Scarborough:
Chapter 4 for an in-depth description. Be sure to include all of the pertinent
sub-topics for your proposed business. This section must include accurate
estimates of revenues and costs based on appropriate research.

6.
Final Analysis – Based on the
information that has been gathered, determine if the proposed business should
proceed to the Business Planning stage.





Feasibility Analysis
Grading Rubric






 

 

 

 

 
 

 
Exceeds
 
 

 
Meets
 
 

 
Does
 Not Meet
 
 

 
Little
 to No Attempt
 
 

 

 

 
Following
 Formatting instructions
 
 

 
8–10
 points
 
Exceeds
 expectations.
 
Easy
 to grade.
 
 

 
4–7
 points
 
Minimally
 meets requirements.
 
 

 
1–3
 points
 
Does
 not meet all requirements.
 
 

 
0
 points
 
Little
 to no effort shown.
 

 

 

 
Cover
 Page
 
and
 Business Description
 
 

 
8–10
 points
 
Comprehensive
 and concise review.
 
 

 
4–7
 points
 
Adequate
 summary.
 
Needs
 more definition.
 
 

 
1–3
 points
 
Misses
 major points.
 
No
 real content.
 
 

 
0
 points
 
Little
 to no effort shown.
 

 

 

 
Industry
 and Market Analysis
 
 

 
31–40
 points
 
Complete
 and thorough job.
 
 

 
21–30
 points
 
Minimally
 meets requirements.
 
 

 
1–20
 points
 
Does
 not meet requirements, or is missing sections.
 
 

 
0
 points
 
Little
 to no effort shown.
 

 

 

 
Product
 or Service Analysis
 
 

 
31–40
 points
 
Complete
 and thorough job.
 
 

 
21–30
 points
 
Minimally
 meets requirements.
 
 

 
1–20
 points
 
Does
 not meet requirements, or is missing sections.
 
 

 
0
 points
 
Little
 to no effort shown.
 

 

 

 
Financial
 Analysis
 
 

 
31–40
 points
 
Complete
 and thorough job.
 
 

 
21–30
 points
 
Minimally
 meets requirements.
 
 

 
1–20
 points
 
Does
 not meet requirements, or is missing sections.
 
 

 
0
 points
 
Little
 to no effort shown.
 

 

 

 
Final
 Analysis/
 
Recommendation
 
 

 
8–10
 points
 
Complete
 and thorough job.
 
 

 
4–7
 points
 
Minimally
 meets requirements.
 
 

 
1–3
 points
 
Does
 not meet requirements, or is missing sections.
 
 

 
0
 points
 
Little
 to no effort shown.
 







** The instructor may adjust
points for work that falls between two grading categories.






	

Project Manageement MCQs

Question
	
1. Which of the following is an example of a project? 
a. Maintaining e-mail addresses 
b. Capacity planning 
c. Submitting travel and expense reports 
d. Sending monthly reports to top management
2. An effective project manager must: 
a. Tell his team members what to do 
b. Be the most capable person on the team technically 
c. Be focused on achieving results 
d. Not trust his team members to achieve results without his personal attention to detail
3. A key characteristic of an effective project team is that: 
a. Members have graduate degrees in project management 
b. Members come from the same professional background 
c. Members see themselves as stakeholders in the project 
d. Members adhere to a prescribed pecking order
4. A challenge of the matrix project organization is that: 
a. Team members are full of ego 
b. Team members are selected from the same functional area 
c. Team members have divided loyalties 
d. It enables functional managers to provide career guidance to their workers
5. A key weakness of the Benefit-Cost ratio project selection mechanism is that: 
a. It only focuses on things that can be measured 
b. It takes time frame into consideration 
c. It is too much based on subjective judgment 
d. It does not entail prioritizing
6. A major strength of task Gantt charts is that they can: 
a. Offer a sophisticated model of a project 
b. Show how many resources will be used on the project 
c. Show the interdependencies of tasks 
d. Show actual versus planned schedule status
7. If you want to shorten the length of a project, you must: 
a. Shorten the critical path 
b. Shorten the free float 
c. Spend more money
d. Cut back on the features you plan to deliver
8. The critical path: 
a. Provides the duration of a project 
b. Has the shortest duration on a project 
c. Is the most expensive path to implement 
d. Contains the project's most significant tasks
9. A tool that graphically shows cost variance is: 
a. A chart of accounts 
b. A code of accounts 
c. A histogram (also called a resource loading chart) 
d. A cumulative cost curve (also called S-curve)
10. Which of the following methods involves performing tasks in parallel? 
a. Crashing 
b. Fast tracking 
c. Leveling 
d. Hammocking
11. Top-down estimates (also called parametric estimates): 
a. Are based on historical trends 
b. Can be derived from the WBS 
c. Can be determined by analyzing work packages 
d. Provide accurate assessments of project costs
12. Bottom-up estimates: 
a. Are based on historical trends 
b. Can be derived from the WBS 
c. Must employ Monte Carlo simulation 
d. a and c
13. Definitive estimates are generally derived from: 
a. Bottom-up estimates 
b. Top-down estimates 
c. Expert judgment cost estimates 
d. Order of magnitude estimates
14. The resource planning tool that enables us to identify who we need to carry out what tasks is called:

a. A resource Gantt chart 
b. A resource matrix (also called the responsibility chart) 
c. A resource ogive 
d. A resource loading chart (also called a resource histogram)
15. Which of the following shows resource allocation over time? 
a. Resource Gantt chart 
b. Resource matrix 
c. S-Curve 
d. Resource leveling
16. What is the function of a change control board (CCB) in configuration management? 
a. To assess the management impacts of change requests 
b. To initiate changes needed on the project 
c. To focus on the technical implication of change requests 
d. To approve change requests coming from senior management
17. Good functional requirements 
a. Describe how the deliverable should be developed 
b. Provide detailed technical insights into what the deliverable will do 
c. Describe what the deliverable looks like and what it should do 
d. Are created after development of the technical specifications
18. The type of management whose focus is on activities whose variances lie outside the acceptable range is: 
a. Management by Objectives 
b. Management by Exception 
c. Management by Walking Around 
d. Management by Control Limits
19. Which of the following is a characteristic of an effective reporting system? 
a. SMART 
b. KISS 
c. MBO 
d. LOWBALLING
20. Which of the following is an elapsed time task? 
a. Paint is drying 
b. A painter paints the wall 
c. Software is being written 
d. A sandwich is being made
21. An autocratic management style:
a. Is effective in most project management situations 
b. Is effective in highly routine efforts 
c. Is effective in high flux, state-of-the-art projects 
d. Will lead to the tyranny of the majority
22. A project team structure that closely reflects the physical structure of the deliverable is known as: 
a. Egoless 
b. Specialty 
c. Surgical 
d. Isomorphic
23. The purpose of mid-project evaluation is: 
a. Continual monitoring of budget and estimates 
b. To focus on achievement of individual element of the project plan 
c. To determine whether the original objectives are still relevant 
d. To re-baseline the project budget
24. If the latest time you can start a task is five hours into the project, and the earliest time is three and a half hours into the project, how much slack (also called float) does the task have? 
a. 0.5 hours 
b. 1.5 hours 
c. 2.5 hours 
d. 8.5 hours
25. In risk management, insurance is an example of: 
a. Risk avoidance 
b. Risk deflection 
c. Risk acceptance 
d. Contingency planning
26. A four step risk assessment process reflecting standard risk management good practice consists of: 
a. Risk identification, Risk deflection, Risk impact analysis, Risk monitoring and control 
b. Risk acceptance, Risk impact analysis, Risk response planning, Risk monitoring and control 
c. Risk deflection, Contingency planning, Risk impact analysis, Risk monitoring and control 
d. Risk identification, Risk impact analysis, Risk response planning, Risk monitoring and control
27. Structured Walk-Through is a methodology used in: 
a. PERT 
b. GERT 
c. VERT 
d. Project Evaluation

28. If review of a project's status indicates that EV = $400, AC = $400, and PV = $500, the project is: 
a. On budget, behind schedule 
b. On budget, ahead of schedule 
c. Over budget, behind schedule 
d. Over budget, ahead of schedule
29. The poor man's hierarchy is a method for: 
a. Project estimation 
b. Project scheduling 
c. WBS construction 
d. Project selection
30. According to PMI, a WBS should focus on 
a. Tasks 
b. Deliverables 
c. Interrelationships among activities 
d. Cost of the project
31. If EV = $300, AC = $400, and the project budget is $1,000, what is the estimated final cost of the project (this is known as EAC, estimate at complete)? 
a. $750 
b. $1,000 
c. $1,250 
d. $1,333
32. Which of the following is a scope planning tool? 
a. Benefit/cost analysis 
b. WBS 
c. Earned Value analysis 
d. Fast tracking
33. In resource planning, one of the issues that needs to be considered is: 
a. Staff empowerment 
b. Technical requirements of the project 
c. Theory X management principles 
d. Theory Y management principles
34. The bottom-most level of the WBS -- the level at which project budget and schedule data are captured -- is called:
a. Work package 
b. Code of accounts 
c. Budget baseline 
d. Change control level
35. Scope creep means: 
a. Needs emergence and identification 
b. Uncontrolled changes to a project's requirements during project execution 
c. Migration of project needs to requirements 
d. Imprecise scope statement
36. Configuration management is a: 
a. Methodology for working closely with customers by developing and updating requirements for faster response to changing customer needs 
b. Methodology for ensuring that requirements evolve with evolving customer requirements 
c. Methodology for specifying requirements at the outset and for controlling very tightly any changes to them 
d. Methodology for specifying requirements at the outset and for facilitating any changes to them with minimum customer input
37. Rapid prototyping is a methodology for: 
a. Specifying requirements at the outset and for controlling very tightly any changes to them 
b. Specifying requirements at the outset and for facilitating later changes to them with minimum customr input 
c. Triggering early warning of unauthorized changes to the original prototype to enable project management to take remedial actions 
d. Working closely with customers by creating and updating prototypes that respond to customer input
38. Ensuring a one-to-one correspondence between specification items and general design items is a feature of: 
a. Scope statement definition 
b. WBS construction 
c. Rapid prototyping 
d. Configuration management
39. Under what conditions may a project manager accept a change request? 
a. If the request has no effect on project objectives, deadlines, or resources. 
b. If the request has no effect on project objectives, although it has effects on deadlines and resources 
c. If the request is coming from a valued customer 
d. If the request is from the Chief Executive Officer
40. Which of the following is not an activity carried out during project closeout? 
a. Reassignment of project staff 
b. Preparation of the project's baseline 
c. Reassignment of material resources 
d. Preparation of user manuals
41. When crashing a project, we typically choose critical path tasks whose costs of crashing are highest. 
True
False
42. The astute project manager typically uses only one management style in order not to confuse his/her teammates. 
True
False
43. Concurrent engineering involves overlapping tasks and phases to accelerate a project's schedule. 
True
False
44. A work package is to be found at the summary level of the WBS. 
True
False
45. Milestones, like tasks, consume resources. 
True
False
46. In project management, the level of uncertainty plays a major role in determining the adequacy of a project plan. 
True
False
47. Using working time or elapsed time to calculate the time it will take to complete a task produces the same results. 
True
False
48. Needs recognition is the first stage of the needs-requirement life cycle. 
True
False
49. Functional requirements provide us with detailed technical specifications. 
True
False
50. A key objective of change control in configuration management is to keep track of actions taken in response to change requests. 
True
False
51. Under rapid prototyping (also called application prototyping), the customer actually sees and works with the deliverable as it evolves. 
True
False
52. There is a definite link between the level of risk an enterprise encounters and project time frame. 
True
False
53. When we have objective data on the probability of an event, we are involved with decision making under certainty. 
True
False
54. The Theory X approach to managing workers is a classic example of a top-down view of how people should be managed. 
True
False
55. A laissez-faire management style may lead to a ship without rudder syndrome. 
True
False
56. An objective of prototyping is to minimize life-cycle cost. 
True
False
57. A modern view in Human Resource Management is that positive motivation results from an opportunity to achieve and experience self-actualization. 
True
False
58. Confidence in the accuracy of a cost estimate increases when top-down and bottom-up estimates converge. 
True
False
59. Internal Rate of Return (IRR) is the discount rate that sets the present value of cash outflow equal to the present value of cash inflow. 
True
False
60. A project can be terminated prematurely because the original objectives may no longer be valid. 
True
False
	

Apple Inc. (not the computer) is located in Washington state

Question
	
Apple Inc. (not the computer) is located in Washington state. They want to produce apples on newly required land or they could do nothing. The new apples will be gala and granny smith. Some industry publications has released the following data:
Granny smith demand

Gala demand Weak Strong
Weak .10 .40
Strong .20 .30

Revenue projections shows an annual contribution to profit of $15000 if Apple Inc. only produces gala apples and demand is weak for gala apples. However, $50,000 can be earned if only gala apples are produced and demand is strong. If Apple Inc. only plants granny smith apples, then $10,000 can be earned if demand is weak, and $70,000 if demand is strong.

If Apple Inc. produces both apples, then look at the following table:

Granny smith demand
Gala demand Weak Strong
Weak $13,000 $45,000
Strong $17,000 $55,000

What is the decision to be made and how much is the profit contribution for all options? Show all your work using the excel add in. Show all branch solutions.	

accounts data bank

Question
	
Chapter
9

Interpretation
of accounts

1.Which of the following is not an essential
prerequisite to permit the successful use of financial

statements
for ratio analysis?

(a)
The accounts should use comparable accounting policies.

(b)
The accounts should be drawn from similar types of organizations.

(c)
The accounts should be available for several accounting periods.

(d)
The accounts used should not include forecast financial information.

2.The current ratio is an indicator of which
following characteristic of an organization?

(a)
The current level of profitability.

(b)
The future level of profitability.

(c)
The investment potential.

(d)
The liquidity in the short term.

The
following data was extracted from the records of XYZ Ltd at 31 December 2001
and is to be

used
for Questions 3 and 4.

£000

Sales
2500

Cost
of sales 1200

Stock
at 31 December 2001 350

Stock
at 1 January 2001 300

Debtors
340

Creditors
400

3.The debtors collection period in days was?

(a)
43.

(b)
45.

(c)
50.

(d)
58.

4.The rate of stock turnover was?

(a)
3.5 times.

(b)
3.7 times.

(c)
6.3 times.

(d)
7.7 times.

5.For a limited company, return on capital
employed is most likely to be calculated by using which of

the
following methods?

(a)
Net profit as a percentage of the average of the opening and closing
borrowings.

(b)
Net profit as a percentage of the average of the opening and closing capital.

(c)
Net profit as a percentage of the average of the opening and closing total
assets.

(d)
Net profit as a percentage of the average of the opening and closing fixed
assets.

6.The following balances were extracted from
the records of XYZ Ltd:

2001 2002

£000 £000

Sales
3000 4000

Gross
profit 600 720

Gross
profit percentage 20% 18%

Which
of the following is the most likely reason for the fall in the gross profit
percentage despite

the
increase in sales in 2002?

(a)
An increase in selling prices.

(b)
A decrease in the costs of purchasing raw materials for the business.

(c)
Offering higher discounts to customers to secure extra sales.

(d)
An increase in wages and salaries.

Chapter
10

Disclosure
of information

1.A limited company is under a legal duty to
disclose information to parties external to the company.

To
which of the following groups does this requirement mainly apply?

(a)
Banks.

(b)
Customers.

(c)
Shareholders.

(d)
Suppliers.

2.Which of the following best describes the
measures which have been taken to stop the practice

known
as ‘creative accounting’?

(a)
Creative accounting has been made a criminal offence.

(b)
The Companies Act forbids directors from engaging in creative accounting.

(c)
The Stock Exchange conditions of listing prohibit the practice.

(d)
The regulatory system has been altered and accounting standards have been
changed to discourage

the
practice.

3.Directors of a limited company are under
an obligation to?

(a)
Send financial statements to employees.

(b)
Send summary financial statements to all shareholders.

(c)
File copies of the financial statements with the registrar of companies.

(d)
Produce financial statements which are correct in all respects.

Accounting for Non-Accounting Students, 5th edition,Lecturer’s
Guide. © Pearson Education Limited 2001113

Chapter
11

The
annual report

1.Which of the following statements
regarding the Chairman’s report in an annual report is correct?

(a)
The report is required by the Companies Act.

(b)
The report is subject to an audit by the external auditors of the company.

(c)
Accounting standards define the format of the Chairman’s report.

(d)
There are no controls over the format or content of the Chairman’s report and
it is not subject to

statutory
audit.

2.Which of the following items is unlikely
to be found in the directors’ report for a limited company?

(a)
A description of the accounting policies of the company.

(b)
Details of corporate donations to charities.

(c)
Details of corporate donations to political parties.

(d)
Details of the company’s health and safety policy.

3.An audit of most limited company financial
statements is required because:

(a)
The Cadbury Report into corporate governance recommended that one should be
undertaken.

(b)
The shareholders of a company usually request one.

(c)
It is required by the Companies Act.

(d)
Banks or other lenders usually request one to be carried out.

4.B Ltd is a subsidiary of A plc if?

(a)
A owns all of the shares in B.

(b)
A is in a position to exercise ‘dominant influence’ over the financial and
operating policies of B.

(c)
A owns the assets of B.

(d)
A has given a substantial loan to B secured on B’s assets by a debenture.

5.A group of companies must prepare
consolidated accounts when which of the following situations

exists?

(a)
A parent company has one or more subsidiary companies.

(b)
When a parent company has overseas subsidiaries.

(c)
When a parent company trades from the same address as its subsidiaries.

(d)
When a company has a participating interest in another associated company.

6.When a company’s financial statements have
been audited, an audit report will be prepared. If this

is
unqualified the auditors will report that the financial statements:

(a)
Are certified correct.

(b)
Contain no material errors.

(c)
Comply with the Companies Act.

(d)
Present a true and fair view and comply with the Companies Act.
	

general business data bank general business data bank

Question
	
1. Decision making is easy,
given that everybody makes decisions everyday.



 



 2. Decision-making must not be done amid
ever-changing factors, unclear information, and conflicting points of view.



 



 3. A decision is a choice made from available
alternatives.



 

 4. Programmed decisions are decisions that are
made for situations that have occurred often in the past and allow decision
rules to be developed to guide future decisions.

 5. Two classifications of management decisions
are programmed and structured.



 



 6. Two employees in Stacey's department quit
which is normal for her department. She is faced with the decision to fill
these positions. This would be considered a nonprogrammed decision.



 7. Gerald's Groceries and Marty's Market decided
to merge their operations. This would be considered a nonprogrammed decision.



 8. WorldCom, a telecommunications company,
decided to buy Skytel in 1999. This would be considered a programmed decision.

 



 9. Uncertainty means that a decision has
clear-cut goals, and that good information is available, but the future
outcomes associated with each alternative are subject to chance.



 10. The main difference between risk and uncertainty is that with risk
you know the probabilities of the outcomes.



 11. Uncertainty is by far the most difficult decision situation.



 12. A situation where the goals to be achieved or the problem to be
solved is unclear, alternatives are difficult to define, and information about
outcomes is unavailable refers to ambiguity.



 



 13. The classical decision making model assumes that the
decision-maker is rational, and makes the optimal decision each time.



 



 14. Normative means it defines how a decision maker should make
decisions.



 15. The political model represents an "ideal" model of
decision making that is often unattainable by real people in real
organizations.



 



 16. The administrative model of decision making describes how managers
actually make decisions in difficult situations.



 

 17. Normative decision theory recognizes that managers have only
limited time and cognitive ability and therefore their decisions are
characterized by bounded rationality.





 18. Satisficing behavior occurs when we choose the first solution
alternative that satisfies minimal decision criteria regardless of whether
better solutions are expected to exist.



 

 19. The administrative model is considered to be normative.



 

 20. Goals often are vague, conflicting, and lack consensus among
managers, according to the administrative model of decision making.

 21. According to the administrative model of decision making,
managers' searches for alternatives are limited because of human, information,
and resource constraints.



 



 22. Intuition is a quick apprehension of a decision situation based on
past experience but without conscious thought.



 23. According to both research and managerial experience, intuitive
decisions are best and always work out.



 



 24. Managers need to take a balanced approach for effective decision
making.





 25. According to the New Manager Self-Test, linear means to use
primarily intuition to make decisions; nonlinear means using logical
rationality to make decisions.
	

Maximus Company has met all production requirements for the current month

Question
	Maximus Company has met all production requirements for the current month and has an opportunity to produce additional units of product with its excess capacity. Unit selling prices and unit costs for three models of one of its product lines are as follows.

Plain model Regular model Super model
Selling price £30.00 £32.50 £40.00
Direct material £9.00 £10.00 £9.50
Direct labour (@ £5 per hour) £5.00 £7.50 £10.00
Variable overhead £4.00 £6.00 £8.00
Fixed overhead £8.00 £7.50 £7.50

Variable overhead is applied on the basis of direct labour dollars, while fixed overhead is applied on the basis of machine hours. There is sufficient demand for the additional production of any model of the product line.

a.	If Maximus Company has excess machine capacity and can add more labour as needed (i.e. neither machine capacity nor labour is a constraint), which product is the most attractive to produce? Provide calculations and reasons to support your answer.

b.	If Maximus Company has excess machine capacity but a limited amount of labour time available, to which product or products should the excess production capacity be devoted? Provide calculations and reasons to support your answer.		

Bluewaves Fishing Supplies Worksheet

Question
	
Bluewaves Fishing Supplies Worksheet	

PSYC1010 exam 4

Question
	
Question 1
Dustin was driving his car on an icy road when the back end started to skid out of control. His car crossed the centerline, and he could see the headlights of rapidly approaching oncoming traffic. His entire body became energized. His heart rate and respiration increased, and he began to perspire profusely. According to Selye’s general adaptation syndrome, Dustin was experiencing

a resistance reaction.

physiological exhaustion.

autonomic rebound.

an alarm reaction.
1 points 
Question 2
The Social Readjustment Rating Scale was designed specifically to measure

change.

conflict.

control.

aggression.
1 points 
Question 3
The idea that emotional tension can be released through behavior and that this response may be adaptive is known as

catharsis.

displacement.

an unconditioned response.

the safety-valve effect.
1 points 
Question 4
Prior to 1996–97, the average length of survival for people after the onset of AIDS was

18 to 24 months.

less than 6 months.

just over 60 months.

36 to 48 months.
1 points 
Question 5
Megan is looking at the ballot form for a citywide referendum and trying to decide whether or not to support the proposed change. If the referendum passes, there will be better services available for all city residents, but it will also mean that residents pay more property taxes. As Megan tries to decide whether to support the proposed referendum, she is facing

an approach-approach conflict.

an approach-avoidance conflict.

an avoidance-avoidance conflict.

a frustration-pressure conflict.
1 points 
Question 6
Laboratory experiments with cardiology patients have shown that brief periods of mental stress

can trigger acute symptoms of heart disease.

have little, or no, impact on overall cardiac function.

can intensify chromic symptoms of heart disease, such as arteriosclerosis.

can trigger emotional responses, such as depression and feelings of despair.
1 points 
Question 7
According to the original frustration-aggression hypothesis,

frustration is always a consequence of aggression.

aggression is always caused by frustration.

frustration causes males to be more aggressive than females.

frustration is only a factor in aggressive behavior for non-human species.
1 points 
Question 8
The correct order for the three stages of Selye’s general adaptation syndrome is

primary, secondary, tertiary.

recognition, reaction, evaluation.

alarm, adaptation, recovery.

alarm, resistance, exhaustion.
1 points 
Question 9
Which of the following is LEAST accurate in regard to defense mechanisms?

they are aimed at protecting one from unwelcome emotions

they use self-deception

they are normal in that everyone uses them

they invariably reduce coping effectiveness
1 points 
Question 10
Holmes and Rahe reasoned that major sources of stress for people come from

failures.

life events involving loss.

changes in one’s life that require readjustment.

only those life changes the person sees as negative.
1 points 
Question 11
The name Hans Selye gave to the body’s response to stress is

the fight-or-flight response.

the general adaptation syndrome.

catharsis.

defensive coping.
1 points 
Question 12
Virginia has wanted to be a physician for as long as she can remember, but she has been unable to gain entry to medical school. Virginia is probably experiencing

burnout.

learned helplessness.

regression.

frustration.
1 points 
Question 13
Coping techniques that involve self-deception to distort reality in order to make a situation appear less threatening are referred to as

maladaptive coping.
adaptive coping.
defensive coping.
constructive coping.
1 points 
Question 14
After a long week balancing her work at the office, visiting her husband who was in the hospital with a broken leg, and making sure she took her turn driving the carpool for her children, Beverly decided she needed some time for herself. She stopped by the mall and purchased the leather jacket she had been admiring. Beverly’s coping response to stress can be BEST described as

indulging oneself.

blaming oneself.

giving up.

constructive coping.
1 points 
Question 15
You have just come face to face with a bear on your walk through the woods. Your body automatically mobilizes itself for action in the ____ stage of the general adaptation syndrome.

resistance

alarm

exhaustion

coping
1 points 
Question 16
Which of the following is an example of a stressful situation that involves pressure?

you just transferred to a different college

you are stuck in a traffic jam on your way to work

you are meeting your significant other’s parents tomorrow and your partner wants you to make a good impression

you can’t decide whether to study for your psychology exam or work on your history paper
1 points 
Question 17
Clarice was in a meeting with several other employees when her boss started to criticize a proposal Clarice had put together for the marketing department. As he started into his critique, Clarice’s heart rate and respiration increased, and she could feel her face and hands become flushed and red. According to Selye’s general adaptation syndrome, Clarice was experiencing

a resistance reaction

physiological exhaustion

autonomic rebound

an alarm reaction
1 points 
Question 18
Which of the following is NOT associated with moderating or reducing the effects of stress?

suppressing pent-up emotions

high levels of social support

regular exercise

relaxation
1 points 
Question 19
The formation of new neurons is known as

exogenesis.

cytogenesis.

pathogenesis.

neurogenisis.
1 points 
Question 20
Melissa has an old car that is desperately in need of expensive repairs. She is trying to decide whether to spend the $1,500 she has in her savings account to repair her old clunker or use her savings to buy the used car that her neighbor has for sale. As Melissa considers which of these two options she will select, she is facing

an approach-approach conflict.

an approach-avoidance conflict.

an avoidance-avoidance conflict.

a frustration-pressure conflict.
1 points 
Question 21
An individual thinks he is Jesus Christ. He also believes that, because he is Christ, people are trying to kill him. Assume that this individual is not correct¾he is not Christ, and people are not trying to kill him. Which of the following would be the MOST likely diagnosis?

multiple personality

paranoid schizophrenia

obsessive-compulsive disorder

catatonic schizophrenia
1 points 
Question 22
Frequently, people call a psychologist for assistance after “deciding for themselves” that they need help. People would be MOST likely to use which two of the commonly used criteria for psychological disorders when deciding to seek treatment?

personal distress and deviance

maladaptive behavior and personal distress

cognitive confusion and maladaptive behavior

deviance and cognitive confusion
1 points 
Question 23
Jazmine has just returned home after receiving treatment for schizophrenia. The clinician who is supervising her case is aware that Jazmine’s family is high in expressed emotion. Under these conditions, Jazmine

has a low risk of relapse.

is likely to develop symptoms of bipolar disorder.

will need little or no medication because she will have high levels of social support.

has a high risk of relapse.
1 points 
Question 24
Researchers have found that depression occurs

nearly twice as frequently in women as in men.

<
label>nearly four times as frequently in women as in men.

with equal frequency in women and in men.

nearly twice as frequently in men as in women.
1 points 
Question 25
Which of the following disorders is seen almost exclusively in affluent Western cultures?

schizophrenia

depression

bipolar illness

anorexia nervosa
1 points 
Question 26
Kevin hears voices singing even though none are present. Kevin suffers from

hallucinations.

delusions.

obsessions.

loosening of associations.
1 points 
Question 27
A person who maintains bizarre, false beliefs that have no basis in reality is said to have

hallucinations.

delusions.

obsessions.

illusions.
1 points 
Question 28
Thomas Szasz would be MOST critical of the commonly used criterion to diagnose psychological disorders that relates to

deviance.

maladaptive behavior.

personal distress.

cognitive confusion.
1 points 
Question 29
Using the DSM-IV listings and lifetime prevalence, it is estimated that ____ of the population will experience a psychological disorder at some time in their lives.

less than 10%

approximately 27%

approximately 44%

close to 60%
1 points 
Question 30
The stress-vulnerability models that have been developed for mood disorders and schizophrenic disorders illustrate which of your text’s unifying themes?

Our experience of the world is highly subjective.

Our behavior is shaped by our cultural heritage.

Psychology is empirical.

Heredity and environment jointly influence behavior.
1 points 
Question 31
Some researchers are investigating whether dysfunctions in neural circuits using ________ play a role in schizophrenia.

acetylcholine

endorphins

opiates

glutamate
1 points 
Question 32
Being careful not to make the conjunction fallacy, indicate which of the following is MOST probable:

Ralph is an alcoholic; Ralph wins a major world tennis tournament.

Ralph is an alcoholic; Ralph enters a treatment program; Ralph wins a major world tennis tournament.

Ralph is an alcoholic; Ralph enters a treatment program; Ralph has been sober for a year; Ralph wins a major world tennis tournament.

Ralph is an alcoholic; Ralph enters a treatment program; Ralph has been sober for a year; Ralph practices tennis 50 hours a week; Ralph wins a major world tennis tournament.
1 points 
Question 33
A prognosis

is a forecast about the probable course of an illness.

involves distinguishing one illness from another.

refers to the apparent causation and developmental history of an illness.

is a plan for treating an illness.
1 points 
Question 34
Treit’s best friend was seriously injured in a car accident last month. Since that time, Treit has been attending all his classes, but he feels like he is unable to pay attention because he is constantly thinking about his friend. Treit finds he can’t seem to think about anything else, and he is frequently overwhelmed by feelings of helplessness. In this example, Treit’s feelings would MOST likely be considered

personally distressing.

culturally deviant.

maladaptive.

compulsive.
1 points 
Question 35
Research concerning the etiology of mood disorders suggests that the influence of genetic factors

is stronger for bipolar disorder than for major depressive disorder.

is stronger for major depressive disorder than for bipolar disorder.

is equally strong for major depressive disorder and bipolar disorder.

is not associated with bipolar disorder.
1 points 
Question 36
Lenny is diagnosed with schizophrenia. He will often remain completely motionless for long periods of time. He almost looks as if he is imitating a store mannequin or a statue. Lenny’s behavior is MOST consistent with

dis
organized schizophrenia.

paranoid schizophrenia.

undifferentiated schizophrenia.

catatonic schizophrenia.
1 points 
Question 37
A type of dissociative disorder characterized by sudden loss of memory for important personal information that sometimes occurs after a person has endured a traumatic event is

dissociative amnesia.

dissociative fugue.

dissociative identity disorder.

dissociative depressive disorder.
1 points 
Question 38
Which of the following statements is LEAST accurate?

Correlations have been found between poor social skills and depression.

Depressed people tend to be evaluated negatively by others.

There is no relationship between depression and environmental stress.

Depressed people tend to have fewer sources of social support.
1 points 
Question 39
Jim came home from the office trembling, experiencing shortness of breath, irritable, unable to concentrate, and worrying about whether his business would still be open next week, despite the fact that his business was evidencing its highest profit ever. Jim’s condition would most likely be diagnosed as

major depression.

a phobic disorder.

generalized anxiety disorder.

a minor psychotic break.
1 points 
Question 40
Alvin suffers from both major depression and generalized anxiety disorder. Alvin’s diagnoses illustrate that mental disorders can be

categorical.

comorbid.

confounded.

epidemiological.
1 points 
Question 41
Which of the following has NOT been an outcome of deinstitutionalization?

a decrease in the average inpatient population in state and county mental hospitals

an increase in the average length of stay in state and county mental hospitals

an increase in the number of mentally ill patients in local general hospitals

more outpatient care of psychological disorders
2 points 
Question 42
Valium and Xanax are

antidepressant drugs.

tranquilizers.

antipsychotic drugs.

MAO inhibitors.
2 points 
Question 43
Most experts believe that for certain types of psychological problems, some treatment approaches are more effective than others. Martin Seligman asserts that obsessive-compulsive disorder responds BEST to

cognitive therapy.

group therapy.

systematic desensitization.

behavior therapy or medication.
2 points 
Question 44
Which of the following statements concerning ECT is FALSE?

Memory loss is a common short-term side effect.

Objective evidence has shown that ECT causes structural damage to the brain.

Use of ECT peaked in the 1940s and 1950s.

ECT is used to treat major depression.
2 points 
Question 45
You are watching a television documentary that shows a patient who is undergoing electroconvulsive therapy (ECT). If this documentary is depicting psychotherapy in the 1930s, you should conclude that

the patient is being treated for severe depression that has not responded to medication.

the patient is being treated for epilepsy.

the doctor is using a form of aversion therapy to reduce compulsive behaviors in a patient with obsessive-compulsive disorder (OCD).

the patient is being treated for schizophrenia.
2 points 
Question 46
Which of the following is NOT a major reason American minority groups tend to underutilize mental health services?

frustrating interactions with bureaucracies

lack of therapists who speak their language

belief that psychological disorders are caused by supernatural forces

distrust of large intimidating institutions such as hospitals and community mental health centers
2 points 
Question 47
The MOST commonly cited side effect associated with antianxiety drugs is

drowsiness.

tachycardia.

blurred vision.

insomnia.
2 points 
Question 48
Contemporary psychodynamic approaches
 to therapy tend to do all of the following EXCEPT

neglect emotional experience.

identify recurring life patterns.

focus on the therapeutic relationship.

address early childhood experiences.
2 points 
Question 49
Of the following, which is NOT a closely related pair of terms?

psychoanalysis and free association

client-centered therapy and clarification

behavior therapy and systematic desensitization

biomedical therapy and aversion therapy
2 points 
Question 50
About ____ of psychotic patients respond favorably to antipsychotic medication.

15%

5%

40%

70%
2 points 
Question 51
Which of the following statements concerning psychiatrists is FALSE?

Psychiatrists specialize in the diagnosis and treatment of psychological disorders.

Psychiatrists typically devote less of their time to relatively serious disorders than clinical psychologists.

Psychiatrists frequently emphasize biomedical therapy.

Psychiatrists are physicians and have a medical degree.
2 points 
Question 52
No matter what Sam tells his therapist concerning his failures or successes, weaknesses or strengths, spiteful behaviors or good deeds, or vengeful feelings or positive emotions, his therapist is very accepting of him as a person. Sam’s therapist is showing him

unconditional positive regard.

genuineness.

empathy.

transference.
2 points 
Question 53
Aversion therapy is a therapy designed to

create a negative response to a stimulus that has elicited problematic behavior.

correct habitual thinking errors and maladaptive beliefs.

reduce phobic responses.

improve interpersonal skills.
2 points 
Question 54
A therapist cures a man of his sexual attraction to children by pairing pictures of children with painful electric shocks. The procedure being used here is

systematic desensitization.

aversion therapy.

extinction.

social skills training.
2 points 
Question 55
Transference in psychoanalytic therapy may reveal itself when the patient

transfers from one stage of analysis to another.

changes the way the patient feels about people close to the patient.

responds to the therapist as though he or she were the patient’s parent.

shifts social roles during the course of therapy.
2 points 
Question 56
The transferring of treatment of mental illness from inpatient institutions to community-based facilities is referred to as

mainstreaming.

exit-transfer therapy.

decentralization.

deinstitutionalization.
2 points 
Question 57
The goal of cognitive therapy is to

use observational learning to overcome maladaptive behavior .

change the clients negative thought and maladaptive beliefs.

use positive reinforcement to change maladaptive behaviors.

use verbal interactions to expand the client’s self-knowledge.
2 points 
Question 58
Jimmy has been in psychotherapy for several months, but during the last few sessions, he has been distracted and inattentive. When his therapist asks him to describe any dreams he has had recently, Jimmy insists that he doesn’t remember any of his dreams. According to Freud, Jimmy’s behavior may be a sign of

defensive neurosis.

resistance.

transference.

insight.
2 points 
Question 59
John suffers from chronic anxiety. He tends to worry constantly and is uncomfortable in a wide variety of situations. He decides to seek therapy. John put considerable thought into what he wants to gain from therapy, believing that if he can learn to calm himself down when he finds himself in anxiety-producing situations (like taking a psychology exam), he will be better able to cope. Based on John’s beliefs, he is MOST likely to seek a therapist who emphasizes the ____ approach.
2 points 
Question 60
When Brett was only six years old, his older sister hid in his closet, then unexpectedly jumped out and scared him when he came into his dark bedroom. As an adult, Brett is still terrified of the dark. Based on principles of classical conditioning, Brett’s current fear of the dark is

behavior therapy

biomedical therapy

insight therapy

emotion therapy

an unconditioned response.

a result of observational learning.

a conditioned response.

a result of counterconditioning.
	

Question_TB10_12Dec

Question
	
Assume a project has normal cash flows (that is,
the initial cash flow is negative, and all other cash flows are positive). Which of the following statements is most
correct?





a. All else
equal, a project’s IRR increases as the cost of capital declines.

b. All else
equal, a project’s NPV increases as the cost of capital declines.

c. All else
equal, a project’s MIRR is unaffected by changes in the cost of capital.

d. Statements
a and b are correct.

e. Statements
b and c are correct.

: 

. Which of
the following statements is most correct?



a. The NPV
method assumes that cash flows will be reinvested at the cost of capital, while
the IRR method assumes reinvestment at the IRR.

b. The NPV
method assumes that cash flows will be reinvested at the risk-free rate, while
the IRR method assumes reinvestment at the IRR.

c. The NPV
method assumes that cash flows will be reinvested at the cost of capital, while
the IRR method assumes reinvestment at the risk-free rate.

d. The NPV
method does not consider the inflation premium.

e. The IRR
method does not consider all relevant cash flows, particularly, cash flows
beyond the payback period.

. A major
disadvantage of the payback period is that it



a. Is useless
as a risk indicator.

b. Ignores
cash flows beyond the payback period.

c. Does not
directly account for the time value of money.

d. Statements
b and c are correct.

e. All of the
statements above are correct.







 

. Projects A
and B have the same expected lives and initial cash outflows. However, one
project’s cash flows are larger in the early years, while the other project has
larger cash flows in the later years.
The two NPV profiles are given below:


 

 

 

 

 


 

 

 


 

 

 

 

 

 

 

 
k (%)

 
 
 
 

 

 

































Which of the following statements is most correct?



a. Project A
has the smaller cash flows in the later years.

b. Project A
has the larger cash flows in the later years.

c. We require
information on the cost of capital in order to determine which project has
larger early cash flows.

d. The NPV
profile graph is inconsistent with the statement made in the problem.

e. None of
the statements above is correct.



 

. Projects
A and B both have normal cash flows. In other words, there is an up-front cost
followed over time by a series of positive cash flows. Both projects have the
same risk and a WACC equal to 10 percent. However, Project A has a higher
internal rate of return than Project B. Assume that changes in the WACC have no
effect on the projects’ cash flow levels.
Which of the following statements is most correct?



a. Project A
must have a higher net present value than Project B.

b. If Project
A has a positive NPV, Project B must also have a positive NPV.

c. If Project
A’s WACC falls, its internal rate of return will increase.

d. If
Projects A and B have the same NPV at the current WACC, Project B would have a
higher NPV if the WACC of both projects was lower.

e. Statements
b and c are correct.







 

. Project
A and Project B are mutually exclusive projects with equal risk. Project A has
an internal rate of return of 12 percent, while Project B has an internal rate
of return of 15 percent. The two
projects have the same net present value when the cost of capital is 7
percent. (In other words, the “crossover
rate” is 7 percent.) Assume each project
has an initial cash outflow followed by a series of inflows. Which of the following statements is most
correct?



a. If the
cost of capital is 10 percent, each project will have a positive net present
value.

b. If the
cost of capital is 6 percent, Project B has a higher net present value than
Project A.

c. If the
cost of capital is 13 percent, Project B has a higher net present value than
Project A.

d. Statements
a and b are correct.

e. Statements
a and c are correct.



 

. Sacramento
Paper is considering two mutually exclusive projects. Project A has an internal rate of return
(IRR) of 12 percent, while Project B has an IRR of 14 percent. The two projects have the same risk, and when
the cost of capital is 7 percent the projects have the same net present value
(NPV). Assume each project has an initial cash outflow followed by a series of
inflows. Given this information, which
of the following statements is most correct?



a. If the cost of capital is 13 percent, Project B’s
NPV will be higher than Project A’s NPV.

b. If the cost of capital is 9 percent, Project B’s
NPV will be higher than Project A’s NPV.

c. If the cost of capital is 9 percent, Project B’s
modified internal rate of return (MIRR) will be less than its IRR.

d. Statements a and c are correct.

e. All of the statements above are correct.



 

. O’Leary
Lumber Company is considering two mutually exclusive projects, Project X and
Project Y. The two projects have normal
cash flows (an up-front cost followed by a series of positive cash flows), the
same risk, and the same 10 percent WACC.
However, Project X has an IRR of 16 percent, while Project Y has an IRR
of 14 percent. Which of the following
statements is most correct?



a. Project X’s NPV must be positive.

b. Project X’s NPV must be higher than Project Y’s
NPV.

c. If Project X has a lower NPV than Project Y,
then this means that Project X must be a larger project.

d. Statements a and c are correct.

e. All
of the statements above are correct.

 

. Cherry
Books is considering two mutually exclusive projects. Project A has an internal rate of return of
18 percent, while Project B has an internal rate of return of 30 percent. The two projects have the same risk, the same
cost of capital, and the timing of the cash flows is similar. Each has an up-front cost followed by a
series of positive cash flows. One of
the projects, however, is much larger than the other. If the cost of capital is 16 percent, the two
projects have the same net present value (NPV); otherwise, their NPVs are
different. Which of the following
statements is most correct?



a. If the cost of capital is 12 percent, Project B
will have a higher NPV.

b. If the cost of capital is 17 percent, Project B
will have a higher NPV.

c. Project B
is larger than Project A.

d. Statements
a and c are correct.

e. Statements
b and c are correct.



 

. Project
X’s IRR is 19 percent. Project Y’s IRR
is 17 percent. Both projects have the
same risk, and both projects have normal cash flows (an up-front cost followed
by a series of positive cash flows). If
the cost of capital is 10 percent, Project Y has a higher NPV than Project
X. Given this information, which of the
following statements is most correct?



a. The crossover
rate between the two projects (that is, the point where the two projects have
the same NPV) is greater than 10 percent.

b. If the
cost of capital is 8 percent, Project X will have a higher NPV than Project Y.

c. If the
cost of capital is 10 percent, Project X’s MIRR is greater than 19 percent.

d. Statements
a and b are correct.

e. All of the
statements above are correct.

 

. Which of
the following statements is most correct?



a. If a
project’s internal rate of return (IRR) exceeds the cost of capital, then the
project’s net present value (NPV) must be positive.

b. If Project
A has a higher IRR than Project B, then Project A must also have a higher NPV.

c. The IRR
calculation implicitly assumes that all cash flows are reinvested at a rate of
return equal to the cost of capital.

d. Statements
a and c are correct.

e. None of
the statements above is correct.







 

. Project A
has an internal rate of return (IRR) of 15 percent. Project B has an IRR of 14 percent. Both projects have a cost of capital of 12
percent. Which of the following
statements is most correct?



a. Both
projects have a positive net present value (NPV).

b. Project A
must have a higher NPV than Project B.

c. If the cost of capital were less than 12
percent, Project B would have a higher IRR than Project A.

d. Statements
a and c are correct.

e. All of the
statements above are correct.



 

. A project
has an up-front cost of $100,000. The
project’s WACC is 12 percent and its net present value is $10,000. Which of the following statements is most
correct?



a. The project should be rejected
since its return is less than the WACC.

b. The project’s internal rate of
return is greater than 12 percent.

c. The project’s modified internal
rate of return is less than 12 percent.

d. All of the statements above are
correct.

e. None of the statements above is
correct.

. A proposed
project has normal cash flows. In other
words, there is an up-front cost followed over time by a series of positive
cash flows. The project’s internal rate
of return is 12 percent and its WACC is 10 percent. Which of the following
statements is most correct?



a. The
project’s NPV is positive.

b. The
project’s MIRR is greater than 10 percent but less than 12 percent.

c. The
project’s payback period is greater than its discounted payback period.

d. Statements
a and b are correct.

e. All of the
statements above are correct.



 

. Stock C
has a beta of 1.2, while Stock D has a beta of 1.6. Assume that the stock market is
efficient. Which of the following
statements is most correct?



a. The
required rates of return of the two stocks should be the same.

b. The
expected rates of return of the two stocks should be the same.

c. Each stock
should have a required rate of return equal to zero.

d. The NPV of
each stock should equal its expected return.

e. The NPV of
each stock should equal zero.







 

. Moynihan
Motors has a cost of capital of 10.25 percent.
The firm has two normal projects of equal risk. Project A has an internal rate of return of
14 percent, while Project B has an internal rate of return of 12.25
percent. Which of the following
statements is most correct?



a. Both
projects have a positive net present value.

b. If the
projects are mutually exclusive, the firm should always select Project A.

c. If the
crossover rate (that is, the rate at which the Project’s NPV profiles
intersect) is 8 percent, Project A will have a higher net present value than
Project B.

d. Statements
a and b are correct.

e. Statements
a and c are correct.



 

. Project A
has an IRR of 15 percent. Project B has
an IRR of 18 percent. Both projects have the same risk. Which of the following statements is most
correct?



a. If the WACC is 10 percent, both projects will have a positive NPV,
and the NPV of Project B will exceed the NPV of Project A.

b. If the WACC is 15 percent, the NPV of Project B will exceed the NPV
of Project A.

c. If the WACC is less than 18 percent, Project B will always have a
shorter payback than Project A.

d. If the WACC is greater than 18 percent, Project B will always have a
shorter payback than Project A.

e. If the WACC increases, the IRR of both projects will decline.



 

. The
post-audit is used to



a. Improve
cash flow forecasts.

b. Stimulate
management to improve operations and bring results into line with forecasts.

c. Eliminate
potentially profitable but risky projects.

d. Statements
a and b are correct.

e. All of the
statements above are correct.









 

. Projects
L and S each have an initial cost of $10,000, followed by a series of positive
cash inflows. Project L has total,
undiscounted cash inflows of $16,000, while S has total undiscounted inflows of
$15,000. Further, at a discount rate of 10 percent, the two projects have
identical NPVs. Which project’s NPV will
be more sensitive to changes in the discount rate?



a. Project S.

b. Project L.

c. Both
projects are equally sensitive to changes in the discount rate since their NPVs
are equal at all costs of capital.

d. Neither
project is sensitive to changes in the discount rate, since both have NPV
profiles which are horizontal.

e. The
solution cannot be determined unless the timing of the cash flows is known.



 

. Two
mutually exclusive projects each have a cost of $10,000. The total, undiscounted cash flows for
Project L are $15,000, while the undiscounted cash flows for Project S total
$13,000. Their NPV profiles cross at a
discount rate of 10 percent. Which of
the following statements best describes this situation?



a. The NPV
and IRR methods will select the same project if the cost of capital is greater
than 10 percent; for example, 18 percent.

b. The NPV
and IRR methods will select the same project if the cost of capital is less
than 10 percent; for example, 8 percent.

c. To
determine if a ranking conflict will occur between the two projects the cost of
capital is needed as well as an additional piece of information.

d. Project L
should be selected at any cost of capital, because it has a higher IRR.

e. Project S
should be selected at any cost of capital, because it has a higher IRR.



 

. A company
is comparing two mutually exclusive projects with normal cash flows. Project P has an IRR of 15 percent, while
Project Q has an IRR of 20 percent. If
the WACC is 10 percent, the two projects have the same NPV. Which of the
following statements is most correct?



a. If the
WACC is 12 percent, both projects would have a positive NPV.

b. If the
WACC is 12 percent, Project Q would have a higher NPV than Project P.

c. If the
WACC is 8 percent,ProjectQ would have a lower NPV than ProjectP.

d. All of the
statements above are correct.

e. None of
the statements above is correct.



 

. Project C
and Project D are two mutually exclusive projects with normal cash flows and
the same risk. If the WACC were equal to
10 percent, the two projects would have the same positive NPV. However, if the WACC is less than 10 percent,
Project C has a higher NPV, whereas if the WACC is greater than 10 percent,
Project D has a higher NPV. On the basis
of this information, which of the following statements is most correct?



a. Project D has a higher IRR, regardless of the
cost of capital.

b. If the
WACC is less than 10 percent, Project C has a higher IRR.

c. If the
WACC is less than 10 percent, Project D’s MIRR is less than its IRR.

d. Statements
a and c are correct.

e. None of
the statements above is correct.



 

. Project X
and Project Y each have normal cash flows (an up-front cost followed by a
series of positive cash flows) and the same level of risk. Project X has an IRR equal to 12 percent, and
Project Y has an IRR equal to 14 percent.
If the WACC for both projects equals 9 percent, Project X has a higher
net present value than Project Y. Which
of the following statements is most correct?



a. If the
WACC equals 13 percent, Project X will have a negative NPV, while Project Y
will have a positive NPV.

b. Project X
probably has a quicker payback than Project Y.

c. The
crossover rate in which the two projects have the same NPV is greater than 9
percent and less than 12 percent.

d. Statements
a and b are correct.

e. Statements
a and c are correct.



 

. Assume
that you are comparing two mutually exclusive projects. Which of the following statements is most
correct?



a. The NPV
and IRR rules will always lead to the same decision unless one or both of the
projects are “non-normal” in the sense of having only one change of sign in the
cash flow stream, that is, one or more initial cash outflows (the investment)
followed by a series of cash inflows.

b. If a
conflict exists between the NPV and the IRR, the conflict can always be
eliminated by dropping the IRR and replacing it with the MIRR.

c. There will
be a meaningful (as opposed to irrelevant) conflict only if the projects’ NPV
profiles cross, and even then, only if the cost of capital is to the left of
(or lower than) the discount rate at which the crossover occurs.

d. All of the
statements above are correct.

e. None of
the statements above is correct.







 

. Which of
the following statements is incorrect?



a. Assuming a
project has normal cash flows, the NPV will be positive if the IRR is less than
the cost of capital.

b. If the
multiple IRR problem does not exist, any independent project acceptable by the
NPV method will also be acceptable by the IRR method.

c. If IRR = k
(the cost of capital), then NPV = 0.

d. NPV can be
negative if the IRR is positive.

e. The NPV
method is not affected by the multiple IRR problem.



 

. Project J
has the same internal rate of return as Project K. Which of the following statements is most
correct?



a. If the
projects have the same size (scale) they will have the same NPV, even if the
two projects have different levels of risk.

b. If the two
projects have the same risk they will have the same NPV, even if the two
projects are of different size.

c. If the two
projects have the same size (scale) they will have the same discounted payback,
even if the two projects have different levels of risk.

d. All of the
statements above are correct.

e. None of
the statements above is correct.



 

. Which of
the following statements is most correct?



a. If a
project with normal cash flows has an IRR that exceeds the cost of capital,
then the project must have a positive NPV.

b. If the IRR
of Project A exceeds the IRR of Project B, then Project A must also have a
higher NPV.

c. The
modified internal rate of return (MIRR) can never exceed the IRR.

d. Statements
a and c are correct.

e. None of
the statements above is correct.



 

. Which of
the following statements is most correct?



a. The MIRR
method will always arrive at the same conclusion as the NPV method.

b. The MIRR
method can overcome the multiple IRR problem, while the NPV method cannot.

c. The MIRR
method uses a more reasonable assumption about reinvestment rates than the IRR
method. 

d. Statements
a and c are correct.

e. All of the
statements above are correct.







 

. Jurgensen
Medical is considering two mutually exclusive projects with the following
characteristics:



·
The two
projects have the same risk and the same cost of capital.

·
Both projects
have normal cash flows. Specifically,
each has an up-front cost followed by a series of positive cash flows.

·
If the cost
of capital is 12 percent, Project X’s IRR is greater than its MIRR.

·
If the cost
of capital is 12 percent, Project Y’s IRR is less than its MIRR.

·
If the cost
of capital is 10 percent, the two Project’s have the same NPV.



Which of the following statements is
most correct?



a. Project
X’s IRR is greater than 12 percent.

b. Project
Y’s IRR is less than 12 percent.

c. If the
cost of capital is 8 percent, Project X has a lower NPV than Project Y.

d. All of the
statements above are correct.

e. None of
the statements above is correct.



 

. Project X
has an internal rate of return of 20 percent.
Project Y has an internal rate of return of 15 percent. Both projects have a positive net present
value. Which of the following statements
is most correct?



a. Project X must have a higher net
present value than Project Y.

b. If the two projects have the
same WACC, Project X must have a higher net present value.

c. Project X must have a shorter
payback than Project Y.

d. Statements b and c are correct.

e. None of the statements above is
correct.












	

accounts data bank

Question
	
1. If theinterest is compounded quarterly with 8% APR, which of the following statements is CORRECT?



a. The periodic rate of
interest is 2% and the effective rate
of interest is 4%.

b. The periodic rate of
interest is 8% and the effective rate
of interest is greater than 8%.

c. The periodic rate of
interest is 4% and the effective rate
of interest is less than 8%.

d. The periodic rate of
interest is 2% and the effective rate
of interest is greater than 8%.

e. The periodic rate of
interest is 8% and the effective rate
of interest is also 8%.



2. What is the coefficient of
variation for security a?


 

 

 
  
 
 

 
Probability
 
 

 
Ra(State=?)
 
 

 
Rb(State=?)
 

 

 

 
Boom
 
 

 
35%
 
 

 
0.30
 
 

 
0.06
 

 

 

 
Average
 
 

 
40%
 
 

 
0.10
 
 

 
0.06
 

 

 

 
Recession
 
 

 
25%
 
 

 
--0.15
 
 

 
-0.05
 





a.
1.00

b.
1.25

c.
1.36

d.
1.73

e.
1.90



 



3. You plan to save $6,400 per year, beginning immediately. You will make 4 deposits in an account that
pays 5.7% interest. How much will you have 4 years from today?



a. $22,980.31

b. $22,685.69

c. $26,221.12

d. $29,461.93

e. $31,524.26

 



4. Which
of the following investments would have the highest future value at the
end of 10 years? Assume that the
effective annual rate for all investments is the same and is greater than zero.



a. Investment A pays $250 at the beginning
of every year for the next 10 years (a total of 10 payments).

b. Investment B pays $125 at the end of
every 6-month period for the next 10 years (a total of 20 payments).

c. Investment C pays $125 at the beginning
of every 6-month period for the next 10 years (a total of 20 payments).

d. Investment D pays $2,500 at the end
of 10 years (just one payment).

e. Investment E pays $250 at the end of
every year for the next 10 years (a total of 10 payments).

 

 -250



5. Your
uncle has $300,000 invested at 7.5%, and he now wants to retire. He wants to withdraw $35,000 at the end
of each year, starting at the end of this year.
He also wants to have $25,000 left to give you when he ceases to
withdraw funds from the account. For how
many years can he make the $35,000 withdrawals and still have $25,000 left in
the end?



a. 13.48

b. 14.96

c. 15.71

d. 16.49

e. 17.32

 





6. Suppose
you just won the state lottery, and you have a choice between receiving
$2,550,000 today or a 20-year annuity of $250,000, with the first payment
coming one year from today. What rate of
return is built into the annuity?
Disregard taxes.



a. 7.12%

b. 7.49%

c. 7.87%

d. 8.26%

e. 8.67%

 



7. Which
indenture provision may affect the price of the bond differently? 



a. convertibility

b. sinking fund

c. call

d. restrictions on
dividends

e. collateral

8. Suppose
1-year Treasury bonds yield 4.00% while 2-year T-bonds yield 4.80%. Assuming the pure expectations theory is
correct, what is the yield on a 1-year T-bond expected to be one year from now?



a. 5.61%

b. 5.72%

c. 6.22%

d. 5.44%

e. 6.11%

 

9. Which
of the following factors would be most likely to lead to an increase in nominal
interest rates?



a. Households reduce their consumption and
increase their savings.

b. A new technology like the Internet has just
been introduced, and it increases investment opportunities.

c. There is a decrease in expected inflation.

d. The economy falls into a recession.

e. The Federal Reserve decides to try to
stimulate the economy.

 



10. You
are comparing saving
$100 every month for a year vis-à-vis $1,200 at the beginning of the year. How much extra will you have at the end of
the year by saving $ 1,200 at the beginning of the year instead of saving $100
each month at the end of each month. Use 6% interest rate.



a. $35.51


b. $38.44

c. $60.90

d. $63.90

e. $76.71





11. The real risk-free rate is 3.05%, inflation is expected to
be 2.75% this year, and the maturity risk premium is zero. IBM stock has a risk premium of 0.9%. What is
the equilibrium rate of return on a 1-year Treasury bond?



a. 5.51%

b. 5.80%

c. 6.09%

d. 6.39%

e. 6.71%

 



12. Suppose the real risk-free rate is 3.25%, the average
future inflation rate is 4.35%, and a maturity risk premium of 0.07% per year
to maturity applies to both corporate and T-bonds, i.e., MRP = 0.07%(t), where
t is the years to maturity. Suppose also
that a liquidity premium of 0.50% and a default risk premium of 0.90% apply to
A-rated corporate bonds but not to T-bonds.
How much higher would the rate of return be on a 10-year A-rated
corporate bond than on a 5-year Treasury bond?




a. 1.75%

b. 1.84%

c. 1.93%

d. 2.03%

e. 2.13%