Question 1 | | 0.25 / 0.25 points |
APV = NPV (without expansion option) + Value of the expansion option. | | 1) True | | | 2) False | Question 2 | | 0.25 / 0.25 points |
The owner of a professional sports franchise, looking to get a new stadium, would benefit from a put option if the deal falls through. | | 1) True | | | 2) False | Question 3 | | 0.25 / 0.25 points |
If you write a put option, you acquire the right to buy stock at a fixed strike price. | | 1) True | | | 2) False | Question 4 | | 0.25 / 0.25 points |
Risk-neutral approach is an application of the certainty equivalent method. | | 1) True | | | 2) False | MCQs (Theoritical) (0.25 mark) |

Question 5 | | 0 / 0.25 points |
Everything else remaining the same, an increase in fixed costs:
I) increases the break-even point based on NPV
II) increases the accounting break-even point
III) decreases the break-even point based on NPV
IV) decreases the accounting break-even point | | 1) | I and III only | | | | 2) | III and IV only | | | | 3) | II and III only | | | | 4) | I and II only | | Question 6 | | 0.25 / 0.25 points |
The Chief Financial Officer (CFO of a corporation oversees): | | 1) | Treasurer's functions | | | | 2) | Controller's functions | | | | 3) | Both A and B | | | | 4) | None of the above | | Question 7 | | 0.25 / 0.25 points |
Costs associated with the conflicts of interest between the bondholders and the shareholders of a corporation are called: | | 1) | Legal costs | | | | 2) | Bankruptcy costs | | | | 3) | Administrative costs | | | | 4) | Agency costs | | Question 8 | | 0 / 0.25 points |
The controller usually oversees the following functions of a corporation:
I) Preparation of financial statements; II) Internal accounting;