3-1.
The purpose of cash flow forecasting is to:
A. Determine the financing needs and sources for the project
B. Assess the project's debt repaying capacity and payback period
C. Evaluate the project's financial performance
D. All of the above
3-2. Characteristics of profitable cash flow:
A. Nominal profit recorded in accounting books
B. Actual profit received by investors
C. Accurately measures the project's debt repaying capacity
D. All of the above
3-3. Characteristics of project's cash flow:
A. Accurately measures the timing of cash inflows and cash outflows
B. Shows the actual amount of cash that investors have or lack
C. Accurately assesses the project's ability to service its debt obligations
D. All of the above
3-4. Incremental cash flow is defined as:
A. The incremental cash flow to the investor if the new project is undertaken compared to if it is not
undertaken.
B. The incremental cash flow to the investor if the expansion project is undertaken compared to if it is
not undertaken.
C. The incremental cash flow to the investor if the replacement project is undertaken compared to if it
is not undertaken.
D. All of the above.
3-5. Sunk cost of a project is defined as:
A. Costs incurred during the project's preparing investment phase.
B. Costs cannot be recovered if the project is abandoned.
C. Costs are irrelevant to the investment decision.
D. All of the above.
3-6. Opportunity cost is defined as:
A. The highest return that was forgone.
B. The lowest return that was forgone.
C. The next best return that was forgone.
D. The next lowest return that was forgone.
3-7. Which of the following project cash flows can be considered as after-tax cash flow?
A. Operating cash flow
B. Investing cash flow
C. Financing cash flow
D. All of the above
3-8. Which of the following costs is considered a sunk cost in a project?
A. Project's establishing costs
B. Design and construction costs
C. Construction commencement costs
D. Project's company formation costs
3-9. A company is considering a new project. The company currently owns a piece of land that can be
used for the project, but the existing building on the land must be demolished. Which of the following
costs should not be included in the project's cash flow?
A. The market value of the existing building
B. Demolition and site preparation costs
C. Costs of constructing a road for the project last year
D. Opportunity cost of using equipment from another project
3-10. A company specializes in manufacturing steel pipes. The company's management is considering
a new project to produce aluminum pipes, a new product line. Which of the following costs should be
charged to the project?
i. The market value of the company-owned land used for the project is 100 billion VND.
ii. The project uses 20% of the idle capacity of the company's previously invested fire protection
system worth 10 billion VND.
iii. The company's revenue from selling steel pipes decreased by 300 billion VND due to the project.
A. i, ii
B. ii, iii
C. i, iii
D. i, ii, iii
3-11. Consider the following items: i/ Expenses for setting up investment projects; ii/ Workers' salaries
during the production period; iii/ Depreciation expenses; iv/ Collection of proceeds from sales; v/ Only
the cost of construction of the project works. Which of the above items are not recorded in the cash
inflow and cash outflow of the project?
A. i, iii
B. ii, iii, v
C. iii, iv, v
D. i, ii, iii, v
3-12. When should the sunk cost be taken into account in the cash flow of the project?
A. When the sunk cost is relatively large
B. When the sunk cost is borne by the investor
C. When the sunk cost is the cost of project formulation and appraisal
D. Sunk costs should not be saved in the project cash flow
3-13. Principles for recording sunk costs of projects are:
A. Recorded in the total investment of the project
B. Included in the cash outflows for the initial investment of the project
C. Considered as a cash operating expense of the project
D. All answers are correct
3-14. Expenses for making environmental impact assessment reports of projects:
A. Recorded in the investment cash flow of the project
B. Recorded in the total investment but not in the investment cash flow of the project
C. To be considered as a pre-operating expense
D. To be considered as an opportunity cost.
3-15. Opportunity costs of land used in projects are determined by:
A. Transfer price on the market
B. Land rents on the market
C. The price is valuated by the capital contributors
D. Lease prices of the State
3-16. When the project incurs opportunity costs calculated according to the market rent, these costs
shall:
A. Recorded in cash outflows from project operations.
B. Recorded in the project's operating expenses.
C. Recorded in cash outflows from project operations and recorded in the project's operating expenses
D. Not recorded in the cash outflows from the project's operation and also not recorded in the project's
operating expenses
3-17. When establishing the operating cash flow of the project, the opportunity costs calculated
according to the market rental price shall:
A. Recorded in cash outflows from project activities (direct method) and adjusted upwards with after-
tax profit of the project (indirect method).
B. It is recorded in the cash outflows from the project's operation (direct method) and adjusted down
from the project's after-tax profit (indirect method).
C. Not recorded in cash outflows from project activities (direct method) and adjusted upwards with
after-tax profit of the project (indirect method).
D. Not recorded in cash outflows from project activities (direct method) and adjusted down to the
project's after-tax profit (indirect method).
3-18. Which of the following impacts has increased the cash flow of other projects?
A. Yogurt Project and Fermented Yogurt Water Project
B. Projects on oral specialty drugs and projects on injectable specialty drugs
C. Gas stove project and electric stove project
D. Billiards café project and office lunch project
3-19. Which of the following impacts reduces the cash flow of other projects?
A. Apple Watch Project and Iphone Project
B. Gas Station Project and Rest Station Project
C. Walking Shoes Project and Running Shoes Project
D. Pig breeding project and catfish farming project.
3-20. Which of the following impacts increases or loses the cash flow of other projects?
A. Extension investment projects that reduce the revenue of the project before extension
B. Replacement investment projects that cause loss of revenue of the replaced projects
C. Additional investment projects that increase revenue for investors
D. All answers incorrect
3-21. Which of the following statements is not true about planning cash flow in projects ?
A. Calculating incremental cash flow in projects
B. Including opportunity cost
C. Including sunk cost
D. Including effects that increase or loss of cash flow in other projects
3-22. Period of cash flow in bonus projects
A. Month
[Link]
C. Quarter
D. Day
3-23. When does the project cash flow arise ?
A. Beginning of term
B. At the end of term
C. Any time in term
D. All answers incorrect
3-24. Why do they choose finished time to divide cash flow in projects ?
A. To separate investment cash flow from operating cash flow in projects
B. To convenient when identify cash inflow and cash outflow
C. A and B correct
D. A and B incorrect
3-25. Cash flow in projects includes
A. Operating cash flow
B. Investment cash flow
C. Funding cash flow
D. All answers correct
3-26. Operating cash flow is cash inflow and cash outflow for
A. Producing and supplying output product in projects
B. Investing
C. Raising capital
D. Funding
3-27. Investment cash flow is cash inflow and cash outflow for
A. Investing in real assets in projects
B. Investing in fixed assets in projects
C. Investing in financial assets in projects
D. Investing in assets in projects
3-28. Funding cash flow is cash inflow and cash outflow for
A. Raising debt capital in projects
B. Raising equity in projects
C. Raising internal capital in projects
D. Raising external capital in projects
3-29. Paying for material suppliers is noted in
A. Operating cash flow
B. Investment cash flow
C. Funding cash flow
D. All answers incorrect
3-30. Liquidation of fixed assets is noted in
A. Operating cash flow
B. Investment cash flow
C. Funding cash flow
D. All answers incorrect
3-31. Paying loan interest costs is noted in
C. Funding cash flow
3-32. Which of the following changes decreases net operating cash flow in projects ?
D. Increasing minimum balance
3-33. Equity capital for projects is noted in
A. Operating cash flow
B. Investment cash flow
C. Funding cash flow
D. All answers incorrect
3-34. Which of the following items in Equity Point of View - Stockholders (EPV) ?
D. Opportunity costs of land
3-35. Which of the following appraisal viewpoints is a financial viewpoint ?
A. All Equity Point of View (AEPV)
B. Total Investment Point of View - Banks (TIPV)
C. Equity Point of View - Stockholders (EPV)
D. All answers correct
3-36. Project Cash Flow from the All Equity Point of View (AEPV) measures the financial
performance of the project for:
C. Investor
3-37. Project cash flow from the Total Investment Point of View (TIPV) measures the financial
performance of the project for:
D. Owners and banks
3-38. Project Cash Flow from the Equity Point of View (EPV) measures the financial performance of a
project for:
A. Owner
3-39. Project Cash Flow from the All Equity Point of View (AEPV) is the project's cash flow in the
case of
A. Debt-free project
3-40. Project cash flow from the Total Investment Point of View (TIPV) is the project’s cash flow in
the case of
B. Projects with debt and using equity
3-41. Project cash flow from the Equity Point of View (EPV) is the project's cash flow in the case of
C. Project after paying off debt to sponsor
3-42. Choose the correct statement.
A. Cash flow (AEPV) does not take into account the benefit of tax shield from interest, while cash
flow (TIPV) takes into account the benefit of tax shield from interest.
B. Cash flow (AEPV) takes into account the tax shield benefit from interest while cash flow (TIPV)
does not take into account the tax shield benefit from interest
C. Both cash flows (AEPV) and (TIPV) take into account the tax shield benefit from
D. Both cash flows (AEPV) and (TIPV) do not take into account the tax shield benefit from interest.
3-43. Net cash flow from the All Equity Point of View (AEPV) is determined by:
A. Operating cash flow (without tax shield) + Investing cash flow
B. Total Investment Net Cash Flow (TIPV) – Tax Savings by Interest
C. Net Cash Flow Equity (EPV) + Tax Savings from Interest – Financing Cash Flow
D. All of the above answers are correct
3-44. Net cash flow from the Total Investment Point of View (TIPV) is determined by:
A. Operating cash flow (with tax shield) + Investing cash flow
B. Net Cash Flow Total Equity + Tax Savings from Interest
C. Net Cash Flow Equity - Financing Cash Flow
D. All of the above answers are correct
3-45. Net cash flow from the Equity Point of View (EPV) is determined by:
A. Operating cash flow (with tax shield) + Investing cash flow + Financing Cash Flow
B. Net Cash Flow from Total Investment Point of View (TIPV) + Financing Cash Flow
C. Operating cash flow (without tax shield) + Investing cash flow + Tax shield + Financing Cash Flow
D. All of the above answers are correct.
3-46. If the symbol EBIT is profit before tax and interest; NOPAT is operating income after tax, BAT
is income after tax; Dep is depreciation cost; Int is interest expense; TS is tax savings due to debt and
ΔWC is working capital change, which of the following formula is the formula for determining
operating cash flow (with tax shield) from interest?
B. EAT + Dep + Int - ΔWC
3-47. Given EBIT as earnings before interest and taxes, NOPAT as net operating profit after tax, EAT
as earnings after tax, Dep as depreciation expense, Int as interest expense, TS as tax shield from debt,
and WC as working capital, which of the following formulas determines the operating cash flow
(excluding tax shield) from interest?
A. NOPAT + Dep - ΔWC
3-48. The working capital requirement during the project's operational phase refers to the working
capital:
A. Minimum required to sustain normal project operations.
3-49. Which of the following cash flows can be prepared using the direct method?
A. Operating cash flow
B. Investing cash flow
C. Funding cash flow
D. All of the above
3-50. Which of the following cash flows can be prepared using the indirect method?
A. Operating cash flow
3-51. Which of the following cash flows can be prepared using the direct method?
A. Net cash flow from the perspective of Total Equity (AEPV)
B. Net cash flow from the perspective of Total Investment (TIPV)
C. Net cash flow from the perspective of Equity (EPV)
D. All of the above
3-52. Which of the following cash flows can be prepared using the indirect method?
A. Net cash flow from the perspective of Total Equity (AEPV)
B. Net cash flow from the perspective of Total Investment (TIPV)
C. Net cash flow from the perspective of Equity (EPV)
D. All of the above
3-53. The purpose of creating intermediate spreadsheets in the project cash flow planning process is
to:
A. Forecast the project's working capital
B. Evaluate the project's debt repayment ability
C. Calculate annual income tax
D. Establish the project's cash flow
3-54. What is the impact of depreciation expense on a project's cash flow or income?
A. Decreases the project's cash flow by the annual depreciation expense
B. Increases the project's cash flow by the annual depreciation expense
C. Decreases taxable income by the annual depreciation expense
D. Increases taxable income by the annual depreciation expense
3-55. Which of the following depreciation methods increases a project's operating cash flow, assuming
no indirect impact through income tax?
A. Straight-line
B. Declining balance
C. Units of production
D. None of the above methods can increase the project's operating cash flow
3-56. Changing the depreciation period and method will:
A. Directly affect the project's cash flow
B. Indirectly affect the project's cash flow
C. Both directly and indirectly affect the project's cash flow
D. Neither directly nor indirectly affect the project's cash flow
3-57. Choose the correct statement.
A. Interest expenses during the project's operating period is not included in cash outflow from
operating activities.
B. Interest expenses during the project's operating period is included in cash outflow from operating
activities.
C. Interest expenses during the construction period with a grace period is included in cash outflow
from financing activities.
D. Interest expenses during the construction period without a grace period is not included in cash
outflow from financing activities.
3-58. Which of the following statements is correct when handling interest expenses incurred during
the project implementation period?
A. It is included in the total investment cost.
B. It is always capitalized into the principal for the next interest period.
C. It is considered the cash outflows when preparing the initial investment cash flow.
D. It is not capitalized in the initial cost of the fixed asset formed after the investment.
3-59. When interest expenses incurred during the construction period of a project is capitalized, which
of the following changes will occur?
A. Depreciation expense of fixed assets will increase.
B. Interest expense to be paid during the operating period will decrease.
C. Operating expenses before depreciation will increase.
D. The financial performance of the project will decrease.
3-60. Construction interest is recognized in the financing cash flow of a project when:
A. It is incurred during the construction period and capitalized
B. It is incurred during the construction period and is granted a grace period
C. It is incurred during the construction period and is not capitalized
D. It is incurred during the construction period and is added to the principal
3-61. Regarding loan interest during the construction period, which of the following statements is
true?
A. Loan interest during the construction period is an interest payable for construction financing.
B. Loan interest during the construction period is not included in the investing cash flow.
C. Loan interest during the construction period with grace period is not capitalized into the original
cost of fixed assets forming after investing.
D. Loan interest during the construction period with grace period is not included in total investment.
3-62. Capitalization of interest during construction period for expansion investment projects will:
A. Improve the income statement of the project company.
B. Reduce the income statement of the project company.
C. Does not affect the income statement of the project company.
D. Can not predict the changes of the income statement of the project company.
3-63. In a taxable environment, capitalizing interest during construction period for expansion
investment project
A. Increase the operating cash flow of the project company.
B. Decrease the operating cash flow of the project company.
C. Does not affect the operating cash flow of the project company.
D. Can not predict the changes of the operating cash flow of the project company.
3-64. Capitalization of interest during construction period for expansion investment projects will:
A. Increase interest expense and increase annual depreciation expense of the project.
B. Decrease interest expense and decrease annual depreciation expense of the project.
C. Increase interest expense and decrease annual depreciation expense of the project.
D. Decrease interest expense and increase annual depreciation expense of the project.
3-65. Which of the following statements about land residual value is correct?
A. The residual value of land at the beginning liquidation year is always equal to the initial cost.
B. The residual value of land at the beginning liquidation year is always equal to the market value at
the liquidation year.
C. Record all the profit or loss on disposal into the inflow.
D. All of the above statements are incorrect.
3-66. Choose the correct statement
A. In case the land used for a project (long - term) is a purchased land, the residual value is calculated
by the market price at the purchased year.
B. In case of capital contribution by the rights’ investors of using land (long - term), the residual value
is calculated as the case of purchased land.
C. In case the land used for a project is a leased land with annual payment, the project doesn’t have
residual value.
D. All of the above statements are correct.
3-67. The residual value of plant and machine is determined based on:
A. The remaining value of plant and machine at the beginning liquidation year in case it can’t be
valued by market price.
B. The remaining value of plant and machine at the ending year of project’s operation in case it can’t
be valued by market price.
C. The market price of plant and machine at the liquidation year is estimated by experts in case it can
be valued by market price.
D. All of the above statements are correct.
3-68. A company is considering investing in an expansion investment project. The company currently
owns a land with a market price of 120 billion dong and intends to use it for the project. If the project
is implemented, the cost of land purchase is:
A. The market value at the beginning of the project.
B. Equal 0 because land needn't be bought in this project.
C. The market value at the time of purchasing land.
D. The book value at the time of purchasing land.
3-69. Assess the debt repayment capacity of an investment project is based on:
A. Annual earnings after tax of the project.
B. Annual depreciation of the project.
C. Changes in working capital of the project.
D. Net operating cash flow of the project.
3-70. Regarding the DSCR, which of the following statements is true?
A. The capacity of the project's payment of both principal and interest if DSCR in all years > 0.
B. The capacity of the project's payment of both principal and interest if DSCR in all years > 1.
C. The capacity of the project's payment of both principal and interest if DSCR has at least one year >
0.
D. The capacity of the project's payment of both principal and interest if DSCR has at least one year >
1.