ABA CTFA Practice Test - Questions Answers, Page 33
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Two mutually exclusive investment proposals have 'scale differences' (i.e., the cost of the projects differ). Ranking these projects on the basis of IRR, NPV, and PI methods give contradictory results.
If capital is to be rationed for only the current period, a firm should probably first consider selecting projects by descending order of .
The method provides correct rankings of mutually exclusive projects, when one is Not subject to capital rationing.
In an NPV sensitivity graph, a steep sensitivity line for a particular input variable means that a in that variable results in a in NPV.
One potential problem with sensitivity analysis is that it generally looks at sensitivity 'one variable at a time.' However, one way to judge the sensitivity of results to simultaneous changes in two variables, at least, is to construct an .
A bond issue may be retired by:
Protective covenants are:
Which of the following bonds offer the investor the most protection?
A company refunds its bonds for any of the following reasons Except for:
The call-option value of a callable bond is likely to be high when:
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