Question 1 (10 points)

The M.I.R.R. is based on

a	Cash flows being reinvested at a rate always different from WACC
b	Cash flows being reinvested at the YTM on treasury bonds.
c	Cash flows being reinvested at the IRR.
d	Cash flows being reinvested at the WACC or a comparable rate.

Question 2 (10 points)

Flotation costs are incurred in the :

a	Bond market only
b	Preferred equity market only
c	Secondary capital market
d	Primary capital market

Question 3 (10 points)

An investment costs $1548 and pays $138 in perpetuity. If the rate of interest is 9%, what is the NPV of the investment ?

a	Negative $16.67
b	Negative $14.67
c	$0
d	$18.98

Question 4 (10 points)

The W.A.C.C. is a :

a	Risk-adjusted discount rate under all circumstances
b	Non-stochastic discount rate under all circumstances
c	Composite opportunity cost metric
d	Simple opportunity cost metric

Question 5 (10 points)

At a crossover rate of return , two or more streams of Net Present Values are :

a	Equalized
b	Flows with equal Internal Rates of Return
c	Flows with negative Internal Rates of Return
d	Discontinuous

Question 6 (10 points)

An investment of $232 will produce $312.18 in 2 years. What is the Annual Rate of Interest ?

a	36%
b	16%
c	24%
d	20