KIMYO INTERNATIONAL UNIVERSITY IN TASHKENT

Academic year 2023-2024 a.y.

Semester Autumn semester (Semester 1)
Specialization of Masters’ Degree MBA
Discipline Financial Management and
Control
Credits ____ credits
Time given for exam 2 hours (120 minutes)
Students’ ID number __________________________
Examination day February ___, 2024
Examination time 16-00 (4 p.m.)

FINAL EXAMINATION
ANSWER SHEET

Results:
Score for PART 1
Score for PART 2
Score for PART 3
Score for PART 4

Total score:
(max – 70 points)

Professor ____________________________

Head of Department ________________________

Dean of the Master's Department _____________________

 1-PART:

QUESTION:
1. Net Present Value (NPV): Explain how NPV is used in investment decision-making and its
advantages over other investment appraisal techniques.
2. Internal Rate of Return (IRR): Discuss the concept of IRR and its importance in
evaluating capital investment projects.
3. Payback Period (PP): Describe the Payback Period method and its limitations in
assessing the viability of a project.

Grade: ________ points

Comments by
professors:_______________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________

ANSWERS:
 PART 2:

Tеst answers:

1 1 1 1
1 2 3 4 5 6 7 8 9 10 12 14 16 18 19 20
1 3 5 7

Number of correct answers: ________

Grade: ________ points

1. A project requires an initial investment of $150,000 and is expected to generate cash flows of $50,000
per year for 4 years. If the discount rate is 8%, what is the NPV of this project?
A) $20,000
B) -$5,000
C) $15,000
D) $10,000
2. A project with an initial outlay of $200,000 is expected to generate cash inflows of $60,000 annually
for 5 years. What is the approximate IRR of this project?
A) 8%
B) 10%
C) 12%
D) 15%
3. If a project costs $400,000 and generates $120,000 each year, what is its payback period?
A) 3.33 years
B) 4 years
C) 3.5 years
D) 2.5 years
4. A project requires an initial investment of $100,000 and is expected to produce annual cash flows of
$30,000 for 5 years. If the discount rate is 10%, what is the Discounted Payback Period?
A) 3 years
B) 4 years
C) 4.5 years
D) 5 years
5. A company has total debts of $500,000 and total assets of $1,000,000. What is its debt-to-asset ratio?
A) 0.5
B) 0.4
C) 0.6
D) 0.7
6. Net Present Value is best described as:
A) The rate of return on the invested capital
B) The variance of cash flows
C) The present value of an investment’s future net cash flows minus the initial
investment
D) The average annual profit of a project
7. The Internal Rate of Return is:
A) The discount rate that makes the NPV of a project zero
B) Always higher than the cost of capital
C) A measure of a project's liquidity
D) The rate at which a company's stock price grows
8. The Payback Period method:
A) Takes into account the time value of money
 B) Ignores the cash flows that occur after the payback period
C) Is most useful for projects with non-uniform cash flows
D) Focuses primarily on profitability
9. Discounted Payback Period differs from Payback Period as it:
A) Ignores cash flow timing
B) Considers the time value of money
C) Can be used without knowing the discount rate
D) Is always shorter than the Payback Period
10. The difference between the nominal and real interest rate is primarily due to:
A) Market risk
B) Inflation
C) Credit ratings
D) Interest rate caps
11. Liquidity ratios are important because they measure:
A) A company's ability to meet its long-term obligations
B) The profitability of a company
C) A company's ability to quickly convert assets to cash
D) The efficiency of a company's operations
12. Solvency ratios are used to:
A) Measure a company’s operational efficiency
B) Assess a company’s ability to meet its short-term obligations
C) Evaluate a company’s long-term financial health
D) Determine dividend payout
13. Profitability ratios primarily evaluate:
A) The company's creditworthiness
B) The effectiveness of a company's use of its assets
C) A company's ability to generate income relative to revenue, assets, equity, and other
factors
D) The liquidity position of a company
14. Efficiency ratios are important for assessing:
A) The company's debt levels
B) How effectively a company utilizes its assets and liabilities
C) The dividend payout ratio
D) The interest coverage ratio
15. Sensitivity analysis in financial modeling is used to:
A) Predict the exact future cash flows
B) Assess the impact of key variables on a specific outcome
C) Determine the fixed costs of a project
D) Calculate the IRR of an investment
16. Asset Turnover Ratio is an indication of:
A) A company's debt management
B) How efficiently a company is using its assets to generate sales
C) The company's dividend policy
D) The company's share price volatility
17. Capital budgeting is crucial because it:
A) Determines the day-to-day expenditures
B) Helps in deciding on long-term investments
C) Assists in short-term financial planning
D) Focuses on distributing dividends
18. The cost of capital refers to:
A) The interest paid on deposits
B) The total operating costs of a company
 C) The opportunity cost of making a particular investment
D) The dividend paid to shareholders
19. Breakeven analysis is used to:
A) Determine the minimum sales volume needed to avoid losses
B) Calculate the net present value of a project
C) Assess the profitability of a company
D) Set sales targets for the sales team
20. Financial leverage:
A) Decreases the risk of bankruptcy
B) Refers to the use of debt to amplify returns
C) Is irrelevant to a company’s capital structure
D) Reduces the cost of capital

PART 3
CASE
Situation: You are considering investing in a project, which has an initial cost (Year 0) of -$100 and is
expected to generate net revenues of $35, $50, and $30 over the next three years, respectively. If the
nominal discount rate is 15% and the inflation rate is 10%, what is the Net Present Value (NPV) of this
project?

Question: How do you calculate the NPV of the invested project? What steps should you follow in the
calculation and how does a positive or negative NPV affect the decision to invest in the project?
Calculate the NPV in both real and nominal terms.

ANSWER:
Grade: ________ points
Comments from the professor:
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________
 KIMYO INTERNATIONAL UNIVERSITY IN TASHKENT

Academic year 2023-2024 a.y.

Semester Autumn semester (Semester 1)
Specialization of Masters’ Degree MBA
Discipline Financial Management and
Control
Credits ____ credits
Time given for exam 2 hours (120 minutes)
Students’ ID number __________________________
Examination day February ___, 2024
Examination time 16-00 (4 p.m.)

FINAL EXAMINATION
ANSWER SHEET

Results:
Score for PART 1
Score for PART 2
Score for PART 3
Score for PART 4

Total score:
(max – 70 points)

Professor ____________________________

Head of Department ________________________

Dean of the Master's Department _____________________

 1-PART:

QUESTION:
1. Discounted Payback Period (DPP): How does the Discounted Payback Period differ
from the traditional Payback Period, and why is it considered a more accurate
measure?
2. Nominal vs Real Rate: Explain the difference between nominal and real interest rates
and their impact on investment decisions.
3. Financial Ratios - Liquidity Ratios: Discuss the importance of liquidity ratios in
financial analysis and provide examples.

Grade: ________ points

Comments by
professors:_______________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________

ANSWERS:
 PART 2:

Tеst answers:

1 1 1 1
1 2 3 4 5 6 7 8 9 10 12 14 16 18 19 20
1 3 5 7

Number of correct answers: ________

Grade: ________ points

1. A project requires an initial investment of $150,000 and is expected to generate cash flows of $50,000
per year for 4 years. If the discount rate is 8%, what is the NPV of this project?
A) $20,000
B) -$5,000
C) $15,000
D) $10,000
2. A project with an initial outlay of $200,000 is expected to generate cash inflows of $60,000 annually
for 5 years. What is the approximate IRR of this project?
A) 8%
B) 10%
C) 12%
D) 15%
3. If a project costs $400,000 and generates $120,000 each year, what is its payback period?
A) 3.33 years
B) 4 years
C) 3.5 years
D) 2.5 years
4. A project requires an initial investment of $100,000 and is expected to produce annual cash flows of
$30,000 for 5 years. If the discount rate is 10%, what is the Discounted Payback Period?
A) 3 years
B) 4 years
C) 4.5 years
D) 5 years
5. A company has total debts of $500,000 and total assets of $1,000,000. What is its debt-to-asset ratio?
A) 0.5
B) 0.4
C) 0.6
D) 0.7
6. Net Present Value is best described as:
A) The rate of return on the invested capital
B) The variance of cash flows
C) The present value of an investment’s future net cash flows minus the initial
investment
D) The average annual profit of a project
7. The Internal Rate of Return is:
A) The discount rate that makes the NPV of a project zero
B) Always higher than the cost of capital
C) A measure of a project's liquidity
D) The rate at which a company's stock price grows
8. The Payback Period method:
A) Takes into account the time value of money
 B) Ignores the cash flows that occur after the payback period
C) Is most useful for projects with non-uniform cash flows
D) Focuses primarily on profitability
9. Discounted Payback Period differs from Payback Period as it:
A) Ignores cash flow timing
B) Considers the time value of money
C) Can be used without knowing the discount rate
D) Is always shorter than the Payback Period
10. The difference between the nominal and real interest rate is primarily due to:
A) Market risk
B) Inflation
C) Credit ratings
D) Interest rate caps
11. Liquidity ratios are important because they measure:
A) A company's ability to meet its long-term obligations
B) The profitability of a company
C) A company's ability to quickly convert assets to cash
D) The efficiency of a company's operations
12. Solvency ratios are used to:
A) Measure a company’s operational efficiency
B) Assess a company’s ability to meet its short-term obligations
C) Evaluate a company’s long-term financial health
D) Determine dividend payout
13. Profitability ratios primarily evaluate:
A) The company's creditworthiness
B) The effectiveness of a company's use of its assets
C) A company's ability to generate income relative to revenue, assets, equity, and other
factors
D) The liquidity position of a company
14. Efficiency ratios are important for assessing:
A) The company's debt levels
B) How effectively a company utilizes its assets and liabilities
C) The dividend payout ratio
D) The interest coverage ratio
15. Sensitivity analysis in financial modeling is used to:
A) Predict the exact future cash flows
B) Assess the impact of key variables on a specific outcome
C) Determine the fixed costs of a project
D) Calculate the IRR of an investment
16. Asset Turnover Ratio is an indication of:
A) A company's debt management
B) How efficiently a company is using its assets to generate sales
C) The company's dividend policy
D) The company's share price volatility
17. Capital budgeting is crucial because it:
A) Determines the day-to-day expenditures
B) Helps in deciding on long-term investments
C) Assists in short-term financial planning
D) Focuses on distributing dividends
18. The cost of capital refers to:
A) The interest paid on deposits
B) The total operating costs of a company
 C) The opportunity cost of making a particular investment
D) The dividend paid to shareholders
19. Breakeven analysis is used to:
A) Determine the minimum sales volume needed to avoid losses
B) Calculate the net present value of a project
C) Assess the profitability of a company
D) Set sales targets for the sales team
20. Financial leverage:
A) Decreases the risk of bankruptcy
B) Refers to the use of debt to amplify returns
C) Is irrelevant to a company’s capital structure
D) Reduces the cost of capital

PART 3
CASE
Situation: You are considering investing in a project, which has an initial cost (Year 0) of -$100 and is
expected to generate net revenues of $35, $50, and $30 over the next three years, respectively. If the
nominal discount rate is 15% and the inflation rate is 10%, what is the Net Present Value (NPV) of this
project?

Question: How do you calculate the NPV of the invested project? What steps should you follow in the
calculation and how does a positive or negative NPV affect the decision to invest in the project?
Calculate the NPV in both real and nominal terms.

ANSWER:
Grade: ________ points
Comments from the professor:
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________
 KIMYO INTERNATIONAL UNIVERSITY IN TASHKENT

Academic year 2023-2024 a.y.

Semester Autumn semester (Semester 1)
Specialization of Masters’ Degree MBA
Discipline Financial Management and
Control
Credits ____ credits
Time given for exam 2 hours (120 minutes)
Students’ ID number __________________________
Examination day February ___, 2024
Examination time 16-00 (4 p.m.)

FINAL EXAMINATION
ANSWER SHEET

Results:
Score for PART 1
Score for PART 2
Score for PART 3
Score for PART 4

Total score:
(max – 70 points)

Professor ____________________________

Head of Department ________________________

Dean of the Master's Department _____________________

 1-PART:

QUESTION:
1. Financial Ratios - Solvency Ratios: Explain solvency ratios and how they differ from
liquidity ratios in evaluating a company's financial health.
2. Financial Ratios - Profitability Ratios: Evaluate the importance of profitability ratios
in assessing a company's performance.
3. Financial Ratios - Efficiency Ratios: Describe efficiency ratios and how they help in
understanding a company's operational performance.

Grade: ________ points

Comments by
professors:_______________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________

ANSWERS:
 PART 2:

Tеst answers:

1 1 1 1
1 2 3 4 5 6 7 8 9 10 12 14 16 18 19 20
1 3 5 7

Number of correct answers: ________

Grade: ________ points

1. A project requires an initial investment of $150,000 and is expected to generate cash flows of $50,000
per year for 4 years. If the discount rate is 8%, what is the NPV of this project?
A) $20,000
B) -$5,000
C) $15,000
D) $10,000
2. A project with an initial outlay of $200,000 is expected to generate cash inflows of $60,000 annually
for 5 years. What is the approximate IRR of this project?
A) 8%
B) 10%
C) 12%
D) 15%
3. If a project costs $400,000 and generates $120,000 each year, what is its payback period?
A) 3.33 years
B) 4 years
C) 3.5 years
D) 2.5 years
4. A project requires an initial investment of $100,000 and is expected to produce annual cash flows of
$30,000 for 5 years. If the discount rate is 10%, what is the Discounted Payback Period?
A) 3 years
B) 4 years
C) 4.5 years
D) 5 years
5. A company has total debts of $500,000 and total assets of $1,000,000. What is its debt-to-asset ratio?
A) 0.5
B) 0.4
C) 0.6
D) 0.7
6. Net Present Value is best described as:
A) The rate of return on the invested capital
B) The variance of cash flows
C) The present value of an investment’s future net cash flows minus the initial
investment
D) The average annual profit of a project
7. The Internal Rate of Return is:
A) The discount rate that makes the NPV of a project zero
B) Always higher than the cost of capital
C) A measure of a project's liquidity
D) The rate at which a company's stock price grows
8. The Payback Period method:
A) Takes into account the time value of money
 B) Ignores the cash flows that occur after the payback period
C) Is most useful for projects with non-uniform cash flows
D) Focuses primarily on profitability
9. Discounted Payback Period differs from Payback Period as it:
A) Ignores cash flow timing
B) Considers the time value of money
C) Can be used without knowing the discount rate
D) Is always shorter than the Payback Period
10. The difference between the nominal and real interest rate is primarily due to:
A) Market risk
B) Inflation
C) Credit ratings
D) Interest rate caps
11. Liquidity ratios are important because they measure:
A) A company's ability to meet its long-term obligations
B) The profitability of a company
C) A company's ability to quickly convert assets to cash
D) The efficiency of a company's operations
12. Solvency ratios are used to:
A) Measure a company’s operational efficiency
B) Assess a company’s ability to meet its short-term obligations
C) Evaluate a company’s long-term financial health
D) Determine dividend payout
13. Profitability ratios primarily evaluate:
A) The company's creditworthiness
B) The effectiveness of a company's use of its assets
C) A company's ability to generate income relative to revenue, assets, equity, and other
factors
D) The liquidity position of a company
14. Efficiency ratios are important for assessing:
A) The company's debt levels
B) How effectively a company utilizes its assets and liabilities
C) The dividend payout ratio
D) The interest coverage ratio
15. Sensitivity analysis in financial modeling is used to:
A) Predict the exact future cash flows
B) Assess the impact of key variables on a specific outcome
C) Determine the fixed costs of a project
D) Calculate the IRR of an investment
16. Asset Turnover Ratio is an indication of:
A) A company's debt management
B) How efficiently a company is using its assets to generate sales
C) The company's dividend policy
D) The company's share price volatility
17. Capital budgeting is crucial because it:
A) Determines the day-to-day expenditures
B) Helps in deciding on long-term investments
C) Assists in short-term financial planning
D) Focuses on distributing dividends
18. The cost of capital refers to:
A) The interest paid on deposits
B) The total operating costs of a company
 C) The opportunity cost of making a particular investment
D) The dividend paid to shareholders
19. Breakeven analysis is used to:
A) Determine the minimum sales volume needed to avoid losses
B) Calculate the net present value of a project
C) Assess the profitability of a company
D) Set sales targets for the sales team
20. Financial leverage:
A) Decreases the risk of bankruptcy
B) Refers to the use of debt to amplify returns
C) Is irrelevant to a company’s capital structure
D) Reduces the cost of capital

PART 3
CASE
Situation: You are considering investing in a project, which has an initial cost (Year 0) of -$100 and is
expected to generate net revenues of $35, $50, and $30 over the next three years, respectively. If the
nominal discount rate is 15% and the inflation rate is 10%, what is the Net Present Value (NPV) of this
project?

Question: How do you calculate the NPV of the invested project? What steps should you follow in the
calculation and how does a positive or negative NPV affect the decision to invest in the project?
Calculate the NPV in both real and nominal terms.

ANSWER:
Grade: ________ points
Comments from the professor:
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________
 KIMYO INTERNATIONAL UNIVERSITY IN TASHKENT

Academic year 2023-2024 a.y.

Semester Autumn semester (Semester 1)
Specialization of Masters’ Degree MBA
Discipline Financial Management and
Control
Credits ____ credits
Time given for exam 2 hours (120 minutes)
Students’ ID number __________________________
Examination day February ___, 2024
Examination time 16-00 (4 p.m.)

FINAL EXAMINATION
ANSWER SHEET

Results:
Score for PART 1
Score for PART 2
Score for PART 3
Score for PART 4

Total score:
(max – 70 points)

Professor ____________________________

Head of Department ________________________

Dean of the Master's Department _____________________

 1-PART:

QUESTION:
1. Sensitivity Analysis in Financial Modeling: Discuss the role of sensitivity analysis in
financial modeling and decision-making.
2. Asset Turnover Ratios: Explain the concept of asset turnover ratios and their
significance in evaluating a company's operational efficiency.
3. Capital Budgeting: Discuss the importance of capital budgeting and the methods
used in the process.

Grade: ________ points

Comments by
professors:_______________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________

ANSWERS:
 PART 2:

Tеst answers:

1 1 1 1
1 2 3 4 5 6 7 8 9 10 12 14 16 18 19 20
1 3 5 7

Number of correct answers: ________

Grade: ________ points

1. A project requires an initial investment of $150,000 and is expected to generate cash flows of $50,000
per year for 4 years. If the discount rate is 8%, what is the NPV of this project?
A) $20,000
B) -$5,000
C) $15,000
D) $10,000
2. A project with an initial outlay of $200,000 is expected to generate cash inflows of $60,000 annually
for 5 years. What is the approximate IRR of this project?
A) 8%
B) 10%
C) 12%
D) 15%
3. If a project costs $400,000 and generates $120,000 each year, what is its payback period?
A) 3.33 years
B) 4 years
C) 3.5 years
D) 2.5 years
4. A project requires an initial investment of $100,000 and is expected to produce annual cash flows of
$30,000 for 5 years. If the discount rate is 10%, what is the Discounted Payback Period?
A) 3 years
B) 4 years
C) 4.5 years
D) 5 years
5. A company has total debts of $500,000 and total assets of $1,000,000. What is its debt-to-asset ratio?
A) 0.5
B) 0.4
C) 0.6
D) 0.7
6. Net Present Value is best described as:
A) The rate of return on the invested capital
B) The variance of cash flows
C) The present value of an investment’s future net cash flows minus the initial
investment
D) The average annual profit of a project
7. The Internal Rate of Return is:
A) The discount rate that makes the NPV of a project zero
B) Always higher than the cost of capital
C) A measure of a project's liquidity
D) The rate at which a company's stock price grows
8. The Payback Period method:
A) Takes into account the time value of money
 B) Ignores the cash flows that occur after the payback period
C) Is most useful for projects with non-uniform cash flows
D) Focuses primarily on profitability
9. Discounted Payback Period differs from Payback Period as it:
A) Ignores cash flow timing
B) Considers the time value of money
C) Can be used without knowing the discount rate
D) Is always shorter than the Payback Period
10. The difference between the nominal and real interest rate is primarily due to:
A) Market risk
B) Inflation
C) Credit ratings
D) Interest rate caps
11. Liquidity ratios are important because they measure:
A) A company's ability to meet its long-term obligations
B) The profitability of a company
C) A company's ability to quickly convert assets to cash
D) The efficiency of a company's operations
12. Solvency ratios are used to:
A) Measure a company’s operational efficiency
B) Assess a company’s ability to meet its short-term obligations
C) Evaluate a company’s long-term financial health
D) Determine dividend payout
13. Profitability ratios primarily evaluate:
A) The company's creditworthiness
B) The effectiveness of a company's use of its assets
C) A company's ability to generate income relative to revenue, assets, equity, and other
factors
D) The liquidity position of a company
14. Efficiency ratios are important for assessing:
A) The company's debt levels
B) How effectively a company utilizes its assets and liabilities
C) The dividend payout ratio
D) The interest coverage ratio
15. Sensitivity analysis in financial modeling is used to:
A) Predict the exact future cash flows
B) Assess the impact of key variables on a specific outcome
C) Determine the fixed costs of a project
D) Calculate the IRR of an investment
16. Asset Turnover Ratio is an indication of:
A) A company's debt management
B) How efficiently a company is using its assets to generate sales
C) The company's dividend policy
D) The company's share price volatility
17. Capital budgeting is crucial because it:
A) Determines the day-to-day expenditures
B) Helps in deciding on long-term investments
C) Assists in short-term financial planning
D) Focuses on distributing dividends
18. The cost of capital refers to:
A) The interest paid on deposits
B) The total operating costs of a company
 C) The opportunity cost of making a particular investment
D) The dividend paid to shareholders
19. Breakeven analysis is used to:
A) Determine the minimum sales volume needed to avoid losses
B) Calculate the net present value of a project
C) Assess the profitability of a company
D) Set sales targets for the sales team
20. Financial leverage:
A) Decreases the risk of bankruptcy
B) Refers to the use of debt to amplify returns
C) Is irrelevant to a company’s capital structure
D) Reduces the cost of capital

PART 3
CASE
Situation: You are considering investing in a project, which has an initial cost (Year 0) of -$100 and is
expected to generate net revenues of $35, $50, and $30 over the next three years, respectively. If the
nominal discount rate is 15% and the inflation rate is 10%, what is the Net Present Value (NPV) of this
project?

Question: How do you calculate the NPV of the invested project? What steps should you follow in the
calculation and how does a positive or negative NPV affect the decision to invest in the project?
Calculate the NPV in both real and nominal terms.

ANSWER:
Grade: ________ points
Comments from the professor:
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________
 KIMYO INTERNATIONAL UNIVERSITY IN TASHKENT

Academic year 2023-2024 a.y.

Semester Autumn semester (Semester 1)
Specialization of Masters’ Degree MBA
Discipline Financial Management and
Control
Credits ____ credits
Time given for exam 2 hours (120 minutes)
Students’ ID number __________________________
Examination day February ___, 2024
Examination time 16-00 (4 p.m.)

FINAL EXAMINATION
ANSWER SHEET

Results:
Score for PART 1
Score for PART 2
Score for PART 3
Score for PART 4

Total score:
(max – 70 points)

Professor ____________________________

Head of Department ________________________

Dean of the Master's Department _____________________

 1-PART:

QUESTION:
1. Cost of Capital: Explain the concept of the cost of capital and its relevance in
investment decisions.
2. Breakeven Analysis: Describe the concept of breakeven analysis and its significance
in business planning and decision-making.
3. Financial Leverage: Discuss the impact of financial leverage on a company’s
profitability and risk.

Grade: ________ points

Comments by
professors:_______________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________

ANSWERS:
 PART 2:

Tеst answers:

1 1 1 1
1 2 3 4 5 6 7 8 9 10 12 14 16 18 19 20
1 3 5 7

Number of correct answers: ________

Grade: ________ points

1. A project requires an initial investment of $150,000 and is expected to generate cash flows of $50,000
per year for 4 years. If the discount rate is 8%, what is the NPV of this project?
A) $20,000
B) -$5,000
C) $15,000
D) $10,000
2. A project with an initial outlay of $200,000 is expected to generate cash inflows of $60,000 annually
for 5 years. What is the approximate IRR of this project?
A) 8%
B) 10%
C) 12%
D) 15%
3. If a project costs $400,000 and generates $120,000 each year, what is its payback period?
A) 3.33 years
B) 4 years
C) 3.5 years
D) 2.5 years
4. A project requires an initial investment of $100,000 and is expected to produce annual cash flows of
$30,000 for 5 years. If the discount rate is 10%, what is the Discounted Payback Period?
A) 3 years
B) 4 years
C) 4.5 years
D) 5 years
5. A company has total debts of $500,000 and total assets of $1,000,000. What is its debt-to-asset ratio?
A) 0.5
B) 0.4
C) 0.6
D) 0.7
6. Net Present Value is best described as:
A) The rate of return on the invested capital
B) The variance of cash flows
C) The present value of an investment’s future net cash flows minus the initial
investment
D) The average annual profit of a project
7. The Internal Rate of Return is:
A) The discount rate that makes the NPV of a project zero
B) Always higher than the cost of capital
C) A measure of a project's liquidity
D) The rate at which a company's stock price grows
8. The Payback Period method:
A) Takes into account the time value of money
 B) Ignores the cash flows that occur after the payback period
C) Is most useful for projects with non-uniform cash flows
D) Focuses primarily on profitability
9. Discounted Payback Period differs from Payback Period as it:
A) Ignores cash flow timing
B) Considers the time value of money
C) Can be used without knowing the discount rate
D) Is always shorter than the Payback Period
10. The difference between the nominal and real interest rate is primarily due to:
A) Market risk
B) Inflation
C) Credit ratings
D) Interest rate caps
11. Liquidity ratios are important because they measure:
A) A company's ability to meet its long-term obligations
B) The profitability of a company
C) A company's ability to quickly convert assets to cash
D) The efficiency of a company's operations
12. Solvency ratios are used to:
A) Measure a company’s operational efficiency
B) Assess a company’s ability to meet its short-term obligations
C) Evaluate a company’s long-term financial health
D) Determine dividend payout
13. Profitability ratios primarily evaluate:
A) The company's creditworthiness
B) The effectiveness of a company's use of its assets
C) A company's ability to generate income relative to revenue, assets, equity, and other
factors
D) The liquidity position of a company
14. Efficiency ratios are important for assessing:
A) The company's debt levels
B) How effectively a company utilizes its assets and liabilities
C) The dividend payout ratio
D) The interest coverage ratio
15. Sensitivity analysis in financial modeling is used to:
A) Predict the exact future cash flows
B) Assess the impact of key variables on a specific outcome
C) Determine the fixed costs of a project
D) Calculate the IRR of an investment
16. Asset Turnover Ratio is an indication of:
A) A company's debt management
B) How efficiently a company is using its assets to generate sales
C) The company's dividend policy
D) The company's share price volatility
17. Capital budgeting is crucial because it:
A) Determines the day-to-day expenditures
B) Helps in deciding on long-term investments
C) Assists in short-term financial planning
D) Focuses on distributing dividends
18. The cost of capital refers to:
A) The interest paid on deposits
B) The total operating costs of a company
 C) The opportunity cost of making a particular investment
D) The dividend paid to shareholders
19. Breakeven analysis is used to:
A) Determine the minimum sales volume needed to avoid losses
B) Calculate the net present value of a project
C) Assess the profitability of a company
D) Set sales targets for the sales team
20. Financial leverage:
A) Decreases the risk of bankruptcy
B) Refers to the use of debt to amplify returns
C) Is irrelevant to a company’s capital structure
D) Reduces the cost of capital

PART 3
CASE
Situation: You are considering investing in a project, which has an initial cost (Year 0) of -$100 and is
expected to generate net revenues of $35, $50, and $30 over the next three years, respectively. If the
nominal discount rate is 15% and the inflation rate is 10%, what is the Net Present Value (NPV) of this
project?

Question: How do you calculate the NPV of the invested project? What steps should you follow in the
calculation and how does a positive or negative NPV affect the decision to invest in the project?
Calculate the NPV in both real and nominal terms.

ANSWER:
Grade: ________ points
Comments from the professor:
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________
 KIMYO INTERNATIONAL UNIVERSITY IN TASHKENT

Academic year 2023-2024 a.y.

Semester Autumn semester (Semester 1)
Specialization of Masters’ Degree MBA
Discipline Financial Management and
Control
Credits ____ credits
Time given for exam 2 hours (120 minutes)
Students’ ID number __________________________
Examination day February ___, 2024
Examination time 16-00 (4 p.m.)

FINAL EXAMINATION
ANSWER SHEET

Results:
Score for PART 1
Score for PART 2
Score for PART 3
Score for PART 4

Total score:
(max – 70 points)

Professor ____________________________

Head of Department ________________________

Dean of the Master's Department _____________________

 1-PART:

QUESTION:
1. Working Capital Management: Explain the importance of working capital
management for a company’s operational efficiency.
2. Dividend Policy: Discuss the factors influencing a company’s dividend policy and its
impact on shareholder value.
3. Foreign Exchange Risk Management: Explain how companies manage foreign
exchange risk in international business operations.

Grade: ________ points

Comments by
professors:_______________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________

ANSWERS:
 PART 2:

Tеst answers:

1 1 1 1
1 2 3 4 5 6 7 8 9 10 12 14 16 18 19 20
1 3 5 7

Number of correct answers: ________

Grade: ________ points

1. A project requires an initial investment of $150,000 and is expected to generate cash flows of $50,000
per year for 4 years. If the discount rate is 8%, what is the NPV of this project?
A) $20,000
B) -$5,000
C) $15,000
D) $10,000
2. A project with an initial outlay of $200,000 is expected to generate cash inflows of $60,000 annually
for 5 years. What is the approximate IRR of this project?
A) 8%
B) 10%
C) 12%
D) 15%
3. If a project costs $400,000 and generates $120,000 each year, what is its payback period?
A) 3.33 years
B) 4 years
C) 3.5 years
D) 2.5 years
4. A project requires an initial investment of $100,000 and is expected to produce annual cash flows of
$30,000 for 5 years. If the discount rate is 10%, what is the Discounted Payback Period?
A) 3 years
B) 4 years
C) 4.5 years
D) 5 years
5. A company has total debts of $500,000 and total assets of $1,000,000. What is its debt-to-asset ratio?
A) 0.5
B) 0.4
C) 0.6
D) 0.7
6. Net Present Value is best described as:
A) The rate of return on the invested capital
B) The variance of cash flows
C) The present value of an investment’s future net cash flows minus the initial
investment
D) The average annual profit of a project
7. The Internal Rate of Return is:
A) The discount rate that makes the NPV of a project zero
B) Always higher than the cost of capital
C) A measure of a project's liquidity
D) The rate at which a company's stock price grows
8. The Payback Period method:
A) Takes into account the time value of money
 B) Ignores the cash flows that occur after the payback period
C) Is most useful for projects with non-uniform cash flows
D) Focuses primarily on profitability
9. Discounted Payback Period differs from Payback Period as it:
A) Ignores cash flow timing
B) Considers the time value of money
C) Can be used without knowing the discount rate
D) Is always shorter than the Payback Period
10. The difference between the nominal and real interest rate is primarily due to:
A) Market risk
B) Inflation
C) Credit ratings
D) Interest rate caps
11. Liquidity ratios are important because they measure:
A) A company's ability to meet its long-term obligations
B) The profitability of a company
C) A company's ability to quickly convert assets to cash
D) The efficiency of a company's operations
12. Solvency ratios are used to:
A) Measure a company’s operational efficiency
B) Assess a company’s ability to meet its short-term obligations
C) Evaluate a company’s long-term financial health
D) Determine dividend payout
13. Profitability ratios primarily evaluate:
A) The company's creditworthiness
B) The effectiveness of a company's use of its assets
C) A company's ability to generate income relative to revenue, assets, equity, and other
factors
D) The liquidity position of a company
14. Efficiency ratios are important for assessing:
A) The company's debt levels
B) How effectively a company utilizes its assets and liabilities
C) The dividend payout ratio
D) The interest coverage ratio
15. Sensitivity analysis in financial modeling is used to:
A) Predict the exact future cash flows
B) Assess the impact of key variables on a specific outcome
C) Determine the fixed costs of a project
D) Calculate the IRR of an investment
16. Asset Turnover Ratio is an indication of:
A) A company's debt management
B) How efficiently a company is using its assets to generate sales
C) The company's dividend policy
D) The company's share price volatility
17. Capital budgeting is crucial because it:
A) Determines the day-to-day expenditures
B) Helps in deciding on long-term investments
C) Assists in short-term financial planning
D) Focuses on distributing dividends
18. The cost of capital refers to:
A) The interest paid on deposits
B) The total operating costs of a company
 C) The opportunity cost of making a particular investment
D) The dividend paid to shareholders
19. Breakeven analysis is used to:
A) Determine the minimum sales volume needed to avoid losses
B) Calculate the net present value of a project
C) Assess the profitability of a company
D) Set sales targets for the sales team
20. Financial leverage:
A) Decreases the risk of bankruptcy
B) Refers to the use of debt to amplify returns
C) Is irrelevant to a company’s capital structure
D) Reduces the cost of capital

PART 3
CASE
Situation: You are considering investing in a project, which has an initial cost (Year 0) of -$100 and is
expected to generate net revenues of $35, $50, and $30 over the next three years, respectively. If the
nominal discount rate is 15% and the inflation rate is 10%, what is the Net Present Value (NPV) of this
project?

Question: How do you calculate the NPV of the invested project? What steps should you follow in the
calculation and how does a positive or negative NPV affect the decision to invest in the project?
Calculate the NPV in both real and nominal terms.

ANSWER:
Grade: ________ points
Comments from the professor:
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________
 KIMYO INTERNATIONAL UNIVERSITY IN TASHKENT

Academic year 2023-2024 a.y.

Semester Autumn semester (Semester 1)
Specialization of Masters’ Degree MBA
Discipline Financial Management and
Control
Credits ____ credits
Time given for exam 2 hours (120 minutes)
Students’ ID number __________________________
Examination day February ___, 2024
Examination time 16-00 (4 p.m.)

FINAL EXAMINATION
ANSWER SHEET

Results:
Score for PART 1
Score for PART 2
Score for PART 3
Score for PART 4

Total score:
(max – 70 points)

Professor ____________________________

Head of Department ________________________

Dean of the Master's Department _____________________

 1-PART:

QUESTION:
1. Mergers and Acquisitions: Discuss the financial considerations in mergers and
acquisitions.

2. Corporate Restructuring: Explain the financial implications of corporate

restructuring activities.

3. Project Financing: Describe the key elements and challenges of project financing.

Grade: ________ points

Comments by
professors:_______________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________

ANSWERS:
 PART 2:

Tеst answers:

1 1 1 1
1 2 3 4 5 6 7 8 9 10 12 14 16 18 19 20
1 3 5 7

Number of correct answers: ________

Grade: ________ points

1. A project requires an initial investment of $150,000 and is expected to generate cash flows of $50,000
per year for 4 years. If the discount rate is 8%, what is the NPV of this project?
A) $20,000
B) -$5,000
C) $15,000
D) $10,000
2. A project with an initial outlay of $200,000 is expected to generate cash inflows of $60,000 annually
for 5 years. What is the approximate IRR of this project?
A) 8%
B) 10%
C) 12%
D) 15%
3. If a project costs $400,000 and generates $120,000 each year, what is its payback period?
A) 3.33 years
B) 4 years
C) 3.5 years
D) 2.5 years
4. A project requires an initial investment of $100,000 and is expected to produce annual cash flows of
$30,000 for 5 years. If the discount rate is 10%, what is the Discounted Payback Period?
A) 3 years
B) 4 years
C) 4.5 years
D) 5 years
5. A company has total debts of $500,000 and total assets of $1,000,000. What is its debt-to-asset ratio?
A) 0.5
B) 0.4
C) 0.6
D) 0.7
6. Net Present Value is best described as:
A) The rate of return on the invested capital
B) The variance of cash flows
C) The present value of an investment’s future net cash flows minus the initial
investment
D) The average annual profit of a project
7. The Internal Rate of Return is:
A) The discount rate that makes the NPV of a project zero
B) Always higher than the cost of capital
C) A measure of a project's liquidity
D) The rate at which a company's stock price grows
8. The Payback Period method:
A) Takes into account the time value of money
 B) Ignores the cash flows that occur after the payback period
C) Is most useful for projects with non-uniform cash flows
D) Focuses primarily on profitability
9. Discounted Payback Period differs from Payback Period as it:
A) Ignores cash flow timing
B) Considers the time value of money
C) Can be used without knowing the discount rate
D) Is always shorter than the Payback Period
10. The difference between the nominal and real interest rate is primarily due to:
A) Market risk
B) Inflation
C) Credit ratings
D) Interest rate caps
11. Liquidity ratios are important because they measure:
A) A company's ability to meet its long-term obligations
B) The profitability of a company
C) A company's ability to quickly convert assets to cash
D) The efficiency of a company's operations
12. Solvency ratios are used to:
A) Measure a company’s operational efficiency
B) Assess a company’s ability to meet its short-term obligations
C) Evaluate a company’s long-term financial health
D) Determine dividend payout
13. Profitability ratios primarily evaluate:
A) The company's creditworthiness
B) The effectiveness of a company's use of its assets
C) A company's ability to generate income relative to revenue, assets, equity, and other
factors
D) The liquidity position of a company
14. Efficiency ratios are important for assessing:
A) The company's debt levels
B) How effectively a company utilizes its assets and liabilities
C) The dividend payout ratio
D) The interest coverage ratio
15. Sensitivity analysis in financial modeling is used to:
A) Predict the exact future cash flows
B) Assess the impact of key variables on a specific outcome
C) Determine the fixed costs of a project
D) Calculate the IRR of an investment
16. Asset Turnover Ratio is an indication of:
A) A company's debt management
B) How efficiently a company is using its assets to generate sales
C) The company's dividend policy
D) The company's share price volatility
17. Capital budgeting is crucial because it:
A) Determines the day-to-day expenditures
B) Helps in deciding on long-term investments
C) Assists in short-term financial planning
D) Focuses on distributing dividends
18. The cost of capital refers to:
A) The interest paid on deposits
B) The total operating costs of a company
 C) The opportunity cost of making a particular investment
D) The dividend paid to shareholders
19. Breakeven analysis is used to:
A) Determine the minimum sales volume needed to avoid losses
B) Calculate the net present value of a project
C) Assess the profitability of a company
D) Set sales targets for the sales team
20. Financial leverage:
A) Decreases the risk of bankruptcy
B) Refers to the use of debt to amplify returns
C) Is irrelevant to a company’s capital structure
D) Reduces the cost of capital

PART 3
CASE
Situation: You are considering investing in a project, which has an initial cost (Year 0) of -$100 and is
expected to generate net revenues of $35, $50, and $30 over the next three years, respectively. If the
nominal discount rate is 15% and the inflation rate is 10%, what is the Net Present Value (NPV) of this
project?

Question: How do you calculate the NPV of the invested project? What steps should you follow in the
calculation and how does a positive or negative NPV affect the decision to invest in the project?
Calculate the NPV in both real and nominal terms.

ANSWER:
Grade: ________ points
Comments from the professor:
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________
 KIMYO INTERNATIONAL UNIVERSITY IN TASHKENT

Academic year 2023-2024 a.y.

Semester Autumn semester (Semester 1)
Specialization of Masters’ Degree MBA
Discipline Financial Management and
Control
Credits ____ credits
Time given for exam 2 hours (120 minutes)
Students’ ID number __________________________
Examination day February ___, 2024
Examination time 16-00 (4 p.m.)

FINAL EXAMINATION
ANSWER SHEET

Results:
Score for PART 1
Score for PART 2
Score for PART 3
Score for PART 4

Total score:
(max – 70 points)

Professor ____________________________

Head of Department ________________________

Dean of the Master's Department _____________________

 1-PART:

QUESTION:
1. Risk Management in Financial Institutions: Discuss the importance of risk
management in financial institutions.
2. Economic Value Added (EVA): Explain the concept of Economic Value Added and its
use in performance measurement.
3. Corporate Governance in Financial Management: Discuss the role of corporate
governance in financial management and control.

Grade: ________ points

Comments by
professors:_______________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________

ANSWERS:
 PART 2:

Tеst answers:

1 1 1 1
1 2 3 4 5 6 7 8 9 10 12 14 16 18 19 20
1 3 5 7

Number of correct answers: ________

Grade: ________ points

1. A project requires an initial investment of $150,000 and is expected to generate cash flows of $50,000
per year for 4 years. If the discount rate is 8%, what is the NPV of this project?
A) $20,000
B) -$5,000
C) $15,000
D) $10,000
2. A project with an initial outlay of $200,000 is expected to generate cash inflows of $60,000 annually
for 5 years. What is the approximate IRR of this project?
A) 8%
B) 10%
C) 12%
D) 15%
3. If a project costs $400,000 and generates $120,000 each year, what is its payback period?
A) 3.33 years
B) 4 years
C) 3.5 years
D) 2.5 years
4. A project requires an initial investment of $100,000 and is expected to produce annual cash flows of
$30,000 for 5 years. If the discount rate is 10%, what is the Discounted Payback Period?
A) 3 years
B) 4 years
C) 4.5 years
D) 5 years
5. A company has total debts of $500,000 and total assets of $1,000,000. What is its debt-to-asset ratio?
A) 0.5
B) 0.4
C) 0.6
D) 0.7
6. Net Present Value is best described as:
A) The rate of return on the invested capital
B) The variance of cash flows
C) The present value of an investment’s future net cash flows minus the initial
investment
D) The average annual profit of a project
7. The Internal Rate of Return is:
A) The discount rate that makes the NPV of a project zero
B) Always higher than the cost of capital
C) A measure of a project's liquidity
D) The rate at which a company's stock price grows
8. The Payback Period method:
A) Takes into account the time value of money
 B) Ignores the cash flows that occur after the payback period
C) Is most useful for projects with non-uniform cash flows
D) Focuses primarily on profitability
9. Discounted Payback Period differs from Payback Period as it:
A) Ignores cash flow timing
B) Considers the time value of money
C) Can be used without knowing the discount rate
D) Is always shorter than the Payback Period
10. The difference between the nominal and real interest rate is primarily due to:
A) Market risk
B) Inflation
C) Credit ratings
D) Interest rate caps
11. Liquidity ratios are important because they measure:
A) A company's ability to meet its long-term obligations
B) The profitability of a company
C) A company's ability to quickly convert assets to cash
D) The efficiency of a company's operations
12. Solvency ratios are used to:
A) Measure a company’s operational efficiency
B) Assess a company’s ability to meet its short-term obligations
C) Evaluate a company’s long-term financial health
D) Determine dividend payout
13. Profitability ratios primarily evaluate:
A) The company's creditworthiness
B) The effectiveness of a company's use of its assets
C) A company's ability to generate income relative to revenue, assets, equity, and other
factors
D) The liquidity position of a company
14. Efficiency ratios are important for assessing:
A) The company's debt levels
B) How effectively a company utilizes its assets and liabilities
C) The dividend payout ratio
D) The interest coverage ratio
15. Sensitivity analysis in financial modeling is used to:
A) Predict the exact future cash flows
B) Assess the impact of key variables on a specific outcome
C) Determine the fixed costs of a project
D) Calculate the IRR of an investment
16. Asset Turnover Ratio is an indication of:
A) A company's debt management
B) How efficiently a company is using its assets to generate sales
C) The company's dividend policy
D) The company's share price volatility
17. Capital budgeting is crucial because it:
A) Determines the day-to-day expenditures
B) Helps in deciding on long-term investments
C) Assists in short-term financial planning
D) Focuses on distributing dividends
18. The cost of capital refers to:
A) The interest paid on deposits
B) The total operating costs of a company
 C) The opportunity cost of making a particular investment
D) The dividend paid to shareholders
19. Breakeven analysis is used to:
A) Determine the minimum sales volume needed to avoid losses
B) Calculate the net present value of a project
C) Assess the profitability of a company
D) Set sales targets for the sales team
20. Financial leverage:
A) Decreases the risk of bankruptcy
B) Refers to the use of debt to amplify returns
C) Is irrelevant to a company’s capital structure
D) Reduces the cost of capital

PART 3
CASE
Situation: You are considering investing in a project, which has an initial cost (Year 0) of -$100 and is
expected to generate net revenues of $35, $50, and $30 over the next three years, respectively. If the
nominal discount rate is 15% and the inflation rate is 10%, what is the Net Present Value (NPV) of this
project?

Question: How do you calculate the NPV of the invested project? What steps should you follow in the
calculation and how does a positive or negative NPV affect the decision to invest in the project?
Calculate the NPV in both real and nominal terms.

ANSWER:
Grade: ________ points
Comments from the professor:
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________
 KIMYO INTERNATIONAL UNIVERSITY IN TASHKENT

Academic year 2023-2024 a.y.

Semester Autumn semester (Semester 1)
Specialization of Masters’ Degree MBA
Discipline Financial Management and
Control
Credits ____ credits
Time given for exam 2 hours (120 minutes)
Students’ ID number __________________________
Examination day February ___, 2024
Examination time 16-00 (4 p.m.)

FINAL EXAMINATION
ANSWER SHEET

Results:
Score for PART 1
Score for PART 2
Score for PART 3
Score for PART 4

Total score:
(max – 70 points)

Professor ____________________________

Head of Department ________________________

Dean of the Master's Department _____________________

 1-PART:

QUESTION:
4. Net Present Value (NPV): Explain how NPV is used in investment decision-making and its
advantages over other investment appraisal techniques.
5. Internal Rate of Return (IRR): Discuss the concept of IRR and its importance in
evaluating capital investment projects.
6. Payback Period (PP): Describe the Payback Period method and its limitations in
assessing the viability of a project.

Grade: ________ points

Comments by
professors:_______________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________

ANSWERS:
 PART 2:

Tеst answers:

1 1 1 1
1 2 3 4 5 6 7 8 9 10 12 14 16 18 19 20
1 3 5 7

Number of correct answers: ________

Grade: ________ points

1. A project requires an initial investment of $150,000 and is expected to generate cash flows of $50,000
per year for 4 years. If the discount rate is 8%, what is the NPV of this project?
A) $20,000
B) -$5,000
C) $15,000
D) $10,000
2. A project with an initial outlay of $200,000 is expected to generate cash inflows of $60,000 annually
for 5 years. What is the approximate IRR of this project?
A) 8%
B) 10%
C) 12%
D) 15%
3. If a project costs $400,000 and generates $120,000 each year, what is its payback period?
A) 3.33 years
B) 4 years
C) 3.5 years
D) 2.5 years
4. A project requires an initial investment of $100,000 and is expected to produce annual cash flows of
$30,000 for 5 years. If the discount rate is 10%, what is the Discounted Payback Period?
A) 3 years
B) 4 years
C) 4.5 years
D) 5 years
5. A company has total debts of $500,000 and total assets of $1,000,000. What is its debt-to-asset ratio?
A) 0.5
B) 0.4
C) 0.6
D) 0.7
6. Net Present Value is best described as:
A) The rate of return on the invested capital
B) The variance of cash flows
C) The present value of an investment’s future net cash flows minus the initial
investment
D) The average annual profit of a project
7. The Internal Rate of Return is:
A) The discount rate that makes the NPV of a project zero
B) Always higher than the cost of capital
C) A measure of a project's liquidity
D) The rate at which a company's stock price grows
8. The Payback Period method:
A) Takes into account the time value of money
 B) Ignores the cash flows that occur after the payback period
C) Is most useful for projects with non-uniform cash flows
D) Focuses primarily on profitability
9. Discounted Payback Period differs from Payback Period as it:
A) Ignores cash flow timing
B) Considers the time value of money
C) Can be used without knowing the discount rate
D) Is always shorter than the Payback Period
10. The difference between the nominal and real interest rate is primarily due to:
A) Market risk
B) Inflation
C) Credit ratings
D) Interest rate caps
11. Liquidity ratios are important because they measure:
A) A company's ability to meet its long-term obligations
B) The profitability of a company
C) A company's ability to quickly convert assets to cash
D) The efficiency of a company's operations
12. Solvency ratios are used to:
A) Measure a company’s operational efficiency
B) Assess a company’s ability to meet its short-term obligations
C) Evaluate a company’s long-term financial health
D) Determine dividend payout
13. Profitability ratios primarily evaluate:
A) The company's creditworthiness
B) The effectiveness of a company's use of its assets
C) A company's ability to generate income relative to revenue, assets, equity, and other
factors
D) The liquidity position of a company
14. Efficiency ratios are important for assessing:
A) The company's debt levels
B) How effectively a company utilizes its assets and liabilities
C) The dividend payout ratio
D) The interest coverage ratio
15. Sensitivity analysis in financial modeling is used to:
A) Predict the exact future cash flows
B) Assess the impact of key variables on a specific outcome
C) Determine the fixed costs of a project
D) Calculate the IRR of an investment
16. Asset Turnover Ratio is an indication of:
A) A company's debt management
B) How efficiently a company is using its assets to generate sales
C) The company's dividend policy
D) The company's share price volatility
17. Capital budgeting is crucial because it:
A) Determines the day-to-day expenditures
B) Helps in deciding on long-term investments
C) Assists in short-term financial planning
D) Focuses on distributing dividends
18. The cost of capital refers to:
A) The interest paid on deposits
B) The total operating costs of a company
 C) The opportunity cost of making a particular investment
D) The dividend paid to shareholders
19. Breakeven analysis is used to:
A) Determine the minimum sales volume needed to avoid losses
B) Calculate the net present value of a project
C) Assess the profitability of a company
D) Set sales targets for the sales team
20. Financial leverage:
A) Decreases the risk of bankruptcy
B) Refers to the use of debt to amplify returns
C) Is irrelevant to a company’s capital structure
D) Reduces the cost of capital

PART 3
CASE
Situation: You are considering investing in a project, which has an initial cost (Year 0) of -$100 and is
expected to generate net revenues of $35, $50, and $30 over the next three years, respectively. If the
nominal discount rate is 15% and the inflation rate is 10%, what is the Net Present Value (NPV) of this
project?

Question: How do you calculate the NPV of the invested project? What steps should you follow in the
calculation and how does a positive or negative NPV affect the decision to invest in the project?
Calculate the NPV in both real and nominal terms.

ANSWER:
Grade: ________ points
Comments from the professor:
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