LO1: Financial Decision-making 1. The well as the magnitude and decision includes the hurdle rate reflecting riskiness of an investment as 2. The well as how you chocision encompasses whether to reinvest in growth opportunities as 3. The and the right kind of debt decision involves the mix of debt and equity that maximizes firm value me tenor of your assets. 4. Growing sales as fast as possible is the best way to maximize firm value? True False LO2: Financial Theory Risk and Flaws 5. Price is the weighted judgement at a precise time of the value of future cash flows? True False 6. Which is a reason cash now beats cash in the future? a. We prefer current to future consumption. b. Monetary inflation kills the value of paper money. c. Promised cash flows may not show up. d. All of the above. 7. Present value of $100 in 3 years, discounted at 10% ? 8. Future value of $100 in 3 years, compounded at 10% ? 9. Does Beta measure absolute risk or volatility? 10. Write out the Expected Return formula: 11. How do Warren Buffett and Charlie Munger use Modern Portfolio Theory (MPT)? LO3: Risk Measurement (Toolkit - CAPM, Beta, WACC) 12. Teradactyl Airlines is based in Nepal. It has a Beta of 1.5. The 10-year U.S. treasury yields 4.0% and the Nepal 10-year yields 10.0%. The expected return of the U.S. market is 10% and 15% for Nepal. What is the expected return? (5 points) 13. Firm-specific risk can be reduced by 14. Market risk can be eliminated by increasing the