1. MIRR fixes all of the issues with the IRR except: a) The multiple IRR problem b) The issue of scale c) NPV d) None of the above 2. 2. The NPV of Depreciation tax shields will be if depreciation is calculated using the Modified Accelerated Cost Recovery System (MACRS) vs. straight line depreciation (assume the interest rate is positive, if it matters). a) larger b) smaller c) the same d) unknown 3. Depreciation reduces our taxable income because... a) The government lets us deduct depreciation when calculating our Taxable income b) Depreciation is a cash expense c) Depreciation is awesome d) None of the above 4. When performing DCF analysis we do not consider sources of financing (loans, sale of stock) because: a) The NPV of financing activities should be zero b) Figuring out the effects of financing activities is someone else's job c) The NPV of financing activities is always positive, so if the NPV of the project is positive, we know we've created value including financing effects d) None of the above 5. For ALL potential projects, if the required return were to suddenly increase, then the NPV would A SHOT AT REDEMPTION!!! a) Definitely decrease b) Definitely increase c) Maybe increase, maybe decrease d) None of the above 6. When performing a DCF analysis, the reason we adjust net income for changes in net working capital is a) GAAP's accrual accounting paradigm means revenues and costs don't correspond to actual cash flows b) GAAP's cash accounting paradigm means revenues and costs don't correspond to actual cash flows c) We don't adjust net income for changes in net working capital d) None of the above 7. All else equal, bonds with coupon rates will have a price that responds more to changes in the interest rates than bonds with a coupon rate a) Lower; higher b) Lower; lower c) Higher; higher d) Higher; lower to get a deeper 8. When analyzing projects, it is a good idea to engage in understanding of the risk and characteristics of a project. a) Sensitivity Analysis b) Scenario Analysis c) Simulation Analysis d) All of the above 9. Payback or Discounted payback method is not an appropriate capital budgetin technique because: a) It ignores cash flows after the arbitrary cutoff b) It is biased against long-term projects c) It is inconsistent with the goal of maximization of shareholder wealth d) All of the above