1.

Which of the following indicators should be used in all cases because it is easy
to calculate, highly stable, and measures the maximum net benefit of the
project?
a. MIRR
b. NPV
c. PP
d. IRR
2. When capital is scarce, market interest rates on capital rise, and the cost of
capital increases, the discount rate will:
a. Indeterminate
b. Remain unchanged
c. Increase
d. Decrease
3. How does MIRR overcome the shortcomings of IRR?
a. It addresses the issue of multiple IRR solutions
b. All of the above are correct
c. It corrects the assumption that annual cash flows are reinvested
d. MIRR reflects the true rate of return from the project
4. What causes the conflict between the conclusions of NPV and IRR?
a. The cash flows of the projects are in the same direction
b. The projects have the same investment scale
c. The cash flows of the projects are unclear
d. The cash flows of the projects are in opposite directions
5. What is the disadvantage of NPV?
a. All of the above are correct
b. NPV does not reflect the incremental value the project brings
c. It does not accurately assess the financial efficiency of the project as it does not
account for the time value of money
d. NPV only shows the total value generated by the project without indicating its
profitability
6. A zero NPV means the project neither profits nor loses, true or false?
a. False
b. Indeterminate
c. NPV is never zero
d. True
7. Which statement is correct regarding EAA?
a. When the least common multiple of the project lifetimes being compared is
more than 10 years, causing the project to repeat multiple times, the equal annual
cash flow method is used
b. When the least common multiple of the project lifetimes being compared is very
small, causing the project to repeat multiple times, the equal annual cash flow
method is used
c. All of the above are incorrect
 d. When the least common multiple of the project lifetimes being compared is
exactly 10 years, causing the project to repeat multiple times, the equal annual
cash flow method is used
8. Which of the following statements is correct about PP (Payback Period)?
a. PP indicates the average profitability from the time capital is invested until the
full recovery of the investment
b. The lower the payback period of an investment, the higher the risk
c. PP shows the income of the project after the investment is recovered
d. The economic lifespan is considered in the PP analysis
9. Which of the following statements is correct about the discount rate?
a. All of the above are correct
b. Changes in the discount rate do not affect the net present value of the project
c. The higher the discount rate, the higher the net present value of projects
d. At a high discount rate, fewer projects will have a positive net present value
10. Which of the following methods can be used when selecting projects with
unequal durations?
a. The elimination method
b. The graphical method
c. The replacement method
d. Both a and b are correct
11. What are the advantages of IRR?
a. IRR is based on the principle that annual cash flows are reinvested at the IRR
itself
b. IRR can provide decisions opposite to NPV for mutually exclusive projects
c. The NPV = 0 function may have multiple solutions or no solution
d. It allows for evaluating the profitability per unit of capital invested and takes
into account the time value of money
12. In terms of liquidity, what does IRR represent?
a. IRR is the growth rate of an investment project, especially for projects with a
single initial cash outflow and a single future cash inflow
b. IRR represents the return on the investment project
c. All of the above are correct
d. IRR represents the maximum interest rate the project can accept when raising
funds for investment
13. Which of the following statements about NPV is correct?
a. Selecting a project based on the NPV criterion provides better results compared
to other criteria when projects have the same lifespan but are mutually exclusive
b. NPV > 0 proves that the net cash flows of the project are > 0 each year
c. NPV > 0 proves that the net profits of the project are > 0 each year
d. NPV is not dependent on the project's discount rate
14. Which of the following criteria does not account for the time value of money?
a. IRR
b. NPV
 c. PI
d. PP
15. Which of the following statements is correct regarding the calculation of the
Payback Period (PP) criterion?
a. The payback period criterion accounts for all cash flows over the project’s life
b. The payback period criterion only considers cash flows up to the payback time
c. The payback period criterion accounts for the time value of money
d. The payback period criterion only considers cash flows after the payback time
16. The total present value of the project's operating cash flows in the PI
criterion is:
a. Indeterminable
b. Always positive
c. Always negative
d. Can be either positive or negative
17. Which of the following statements is correct?
a. If project A has a higher IRR than project B, then the NPV of project A is
higher than B
b. All of the above statements are incorrect
c. For two mutually exclusive projects, the investor should choose the one with the
highest IRR
d. If project A has a higher IRR than project B, then the NPV of project A is lower
than B
18. If the NPV of a project is greater than 0, which of the following expressions is
correct?
a. PP < DPP < project lifespan
b. DPP > PP > project lifespan
c. PP > DPP > project lifespan
d. DPP < PP < project lifespan
19. If an investment project has an NPV of zero, it means:
a. The project breaks even
b. The present value of the total income equals the present value of the total
investment costs
c. The project's rate of return equals the cost of capital invested in the project
d. All of the above statements are correct
20. Summary of the implications of two projects with the same positive NPV:
a. Both projects increase the investor's value equally
b. Both projects have the same internal rate of return
c. Both projects have the same profitability
d. Both projects have the same payback period
21. In which case would a project be accepted?
a. NPV = 0 with the discount rate equal to the expected return
b. NPV = 50 with the discount rate equal to the loan interest rate
 c. NPV = 100 with the discount rate equal to the 12-month savings interest rate
d. All of the above cases would be accepted
22. Given a specific cash flow, predict the value of MIRR compared to IRR:
a. It depends on the discount rate and the project's internal rate of return
b. MIRR = IRR
c. MIRR < IRR
d. MIRR > IRR
23. Which of the following statements about the payback period is incorrect?
a. The payback period does not consider cash flows after the payback time
b. The payback period criterion often leads to accurate conclusions about a
project's financial effectiveness
c. Investors should accept projects with a payback period shorter than the period
they set
d. The payback period does not account for the time value of money
24. The principle for using IRR to evaluate a project: A project should only be
accepted when IRR:
a. ≥ Deposit interest rate and risk premium
b. ≥ Medium to long-term loan interest rate
c. ≥ ROE
d. ≥ WACC
25. Which of the following statements about the payback period is incorrect?
a. The payback period does not consider cash flows after the payback time
b. Investors should accept projects with a payback period shorter than the expected
payback period
c. The payback period criterion often leads to accurate conclusions
d. The payback period does not account for the time value of money
26. If two projects, A and B, have the same lifespan and project A’s annual cash
flows are double those of project B, which of the following expressions is
correct?
a. PP(A) = 2 PP(B)
b. NPV(A) = 2 NPV(B)
c. IRR(A) = 2 IRR(B)
d. MIRR(A) = 2 MIRR(B)
27. The NPV of an investment project is $1,000, discounted at 15%. This can be
interpreted as:
a. The project yields a 15% return on total invested capital
b. The project increases the company's value by $1,000
c. The project yields a 15% return per year plus $1,000 in the present
d. The project yields a $1,000 profit
28. Which of the following statements is incorrect?
a. NPV is a multivalued function of the discount rate variable
b. NPV has a positive correlation with the discount rate
 c. NPV depends on the project's lifespan
d. NPV always has a unique value
29. NPV is defined as:
a. All of the above definitions are correct
b. Net Present Value
c. The present value of operating cash flows minus the initial investment cost
d. The present value of cash flows after the payback time with discounting
30. A project has a 10-year lifespan and an undiscounted payback period of 10
years. Which of the following is correct?
a. DPP < 10 years
b. IRR < r
c. PI > 1
d. NPV < 0
31. Given 0 < r1 < r2 and the project's NPV as follows: NPV(r1) > 0 > NPV(r2).
Choose the correct expression:
a. IRR > r1 > r2
b. r1 < r2 < IRR
c. IRR < r1 < r2
d. r1 < IRR < r2
32. Which of the following is a drawback of the NPV criterion?
a. Sensitive to the discount rate
b. A project may have multiple NPVs or none at all
c. All of the above are drawbacks of the NPV criterion
d. NPV can only be calculated if the net cash flow has at least one negative value
33. When selecting mutually exclusive projects with different lifespans, which
criterion should we use?
a. Project-specific IRR
b. Project-specific EAA
c. Project-specific NPV
d. Project-specific PP or DPP
34. For a project with an NPV that is inversely related to the discount rate, what
will the NPV be if the IRR of the project is 15%?
a. Negative if the discount rate is 20%
b. Negative if the discount rate is 10%
c. Positive if the discount rate is 15%
d. Positive if the discount rate is 20%
35. The discount rate at which the NPV of a project is zero is:
a. Re
b. IRR
c. WACC
d. MIRR
36. A project with NPV = 0 and the discount rate equal to the expected return
would not be accepted because:
 a. The project only just covers the cost of capital
b. The project does not increase net assets
c. None of the above reasons are correct
d. The project only meets the expected return
37. For a project to be accepted, the IRR of the net cash flow (EPV) must be:
a. ≥ The expected (minimum) return on equity
b. ≥ The expected (maximum) return on equity
c. ≥ 12-month savings deposit interest rate
d. ≥ Average market long-term loan interest rate
38. Identify the incorrect statement among the following:
a. NPV and IRR may lead to conflicting decisions when selecting independent
projects.
b. All other factors being equal, projects with shorter payback periods are less
risky than those with longer payback periods.
c. To reflect the financial feasibility of the project itself, the land must be
liquidated at market price in the project's liquidation year.
d. One of the disadvantages of NPV is its dependence on the chosen discount rate.
39. The Profitability Index (PI) explains:
a. All of the above explanations are incorrect.
b. How much income is generated per dollar of initial investment after deducting
the cost of capital.
c. How much income is generated in present value per dollar of initial investment
after deducting the cost of capital.
d. How much income is generated per dollar of initial investment.
40. A project has IRR = 20% and a cost of capital of 15%. In other words, this
means:
a. The project's return exceeds the required rate of return.
b. The project generates a 20% return on the total invested capital.
c. The project covers its cost of capital.
d. All of the above statements are correct.
41. Project A has NPV(A) = 389 and IRR(A) = 25%. Project B has the same
lifespan as Project A and generates twice the cash flows of Project A. The
NPV and IRR of Project B are:
a. NPV(B) = 778 and IRR(B) = 50%
b. NPV(B) = 389 and IRR(B) = 25%
c. NPV(B) = 389 and IRR(B) = 50%
d. NPV(B) = 778 and IRR(B) = 25%
42. Which change would increase the NPV of a project, all other factors
remaining constant:
a. A decrease in annual net operating cash flow
b. A decrease in the discount rate
c. An increase in the project's lifespan
d. An increase in initial investment
43. A project has a negative net cash flow in year 0 and positive cash flows in all
remaining years. Given that the DPP (Discounted Payback Period) is 3 years
and 6 months, choose the correct statement:
a. DPP ≥ PP
b. DPP < Project lifespan
c. All of the above are correct
d. NPV ≥ 0
44. A project has two internal rates of return: IRR1 = 20% and IRR2 = 30%. If
the cost of capital is 25%, the evaluator should:
a. Use the MIRR criterion to assess the project
b. Never evaluate this project
c. Accept the project
d. Reject the project
45. Choose the correct statement:
a. A project with a payback period of 1 year always has NPV > 0.
b. NPV > 0 means that the project generates profit annually.
c. NPV and IRR may lead to conflicting decisions when selecting mutually
exclusive projects.
d. When IRR < WACC, NPV > 0.
46. MIRR is used to overcome which of the following IRR drawbacks:
a. IRR assumes that project cash flows are reinvested at the IRR.
b. The existence of multiple IRRs.
c. The lack of an IRR.
d. All of the above drawbacks of IRR.
47. For a project to be accepted, the IRR of the net cash flow (AEPV) must be:
a. ≥ WACCAT
b. ≥ WACCBT
c. ≥ The average market lending rate
d. = Savings interest rate
48. The difference between the present value of cash inflows and the present value of
cash outflows over the project’s duration is:
a. IRR
b. NPV
c. PP/DPP
d. B/C ratio
49. For a project to be accepted, the IRR of the net cash flow (TIPV) must be:
a. ≥ The average market lending rate
b. ≥ WACCBT
c. ≥ The savings interest rate
d. ≥ WACCAT
50. Company X is considering two investment projects. These two projects have
the same scale of investment nd cash flow pattern. The first project has a
 lifespan of 10 years, while the second project lasts 20 years. Which of the
following criteria is most appropriate for ranking these projects?
a. Net Present Value (NPV)
b. None of the above criteria is correct
c. Profitability Index (PI)
d. Internal Rate of Return (IRR)
51. Choose the correct statement:
a. When the lifespan of a project increases, NPV always increases.
b. B/C ratio is calculated by comparing benefits with investment and operating costs.
c. DPP is positively correlated with the discount rate.
d. IRR is the project's minimum rate of return.
52. A project has a negative net cash flow in year 0, and positive cash flows in all
remaining years. Given that the project cannot recover the investment
according to the discounted payback period (DPP), the project has:
a. PP > DPP
b. IRR > r
c. NPV < 0
d. PI > 1
53. Given the following project information:

What is the project's DSCR for year 2?

a. 2.30 (145/(50 + 13))
b. Insufficient data to calculate
c. 2.90
d. 1.30
54. Given the following project information:
Is the project's debt repayment schedule appropriate?
a. This repayment schedule is appropriate.
b. This repayment schedule is NOT appropriate.
55. Given the following project information:

Is the project's debt repayment schedule appropriate?

a. This repayment schedule is appropriate.
b. This repayment schedule is NOT appropriate.
56. The project is capable of meeting its principal and interest obligations if the
DSCR is greater than 0 for at least one year:
a. False
b. True
57. Construction interest is recorded in the project’s financing cash flow when
incurred during the construction period and is added to the principal:
a. True
b. False
58. Is the following statement true or false regarding the handling of interest
incurred during the project implementation period: It is always added to the
principal for calculating interest in the following period?
a. True
b. False
59. Is the following statement true or false regarding the handling of interest
incurred during the project implementation period: It is not capitalized into
the original cost of the fixed asset formed after the investment?
a. True
b. False
60. Construction interest is recorded in the project’s financing cash flow when
incurred during the construction period and is capitalized:
a. True
b. False