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Net Present Value & Investment Basics Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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Question 1 1. The combination approach _____.

Question 2 2. What are the three approaches to the modified internal rate of return?

Question 3 3. You are a real estate investor, and you're considering buying property A or property B. Property A costs $200,000 and will generate an annual net cash flow of $12,000 per year. Property B costs $220,000 but generates a net annual cash flow of $14,000. You want to recoup your initial investment as quickly as possible. What is the payback period for each property, and which property should you buy?

Question 4 4. What is the internal rate of return?

Question 5 5. What is a disadvantage of the IRR?

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Question 6 6. Which one of the following is NOT a mathematical term in the payback formula?

Question 7 7. How do business leaders use the IRR?

Question 8 8. What is the internal rate of return (IRR)?

Question 9 9. What is the cost of capital?

Question 10 10. Many business leaders use the modified internal rate of return over the internal rate of return _____.

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Question 11 11. What is the modified internal rate of return?

Question 12 12. What is the payback period for an investment that costs $250,000 and generates cash flow of $85,000 with annual expenses of $10,000?

Question 13 13. What is an advantage of the internal rate of return?

Question 14 14. Which of the following is the BEST explanation of payback analysis?

Question 15 15. Which one the following is the correct payback formula?

Net Present Value & Investment Basics Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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