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Free Cash Flow Quiz

Discounted cash flow formulas work for the valuation of:

The present value of free cash flow is $5 million and the present value of the horizon value is $10 million. Calculate the present value of the business.

Shareholders receive cash from the firm in the form of dividends and capital gains.

The return that is expected by investors from a common stock is often called its market capitalization rate.

The value of a share of common stock is equal to the disconnected stream of free cash flow per share.

Which of the following investment rules does not use the time value of the money concept?

If the net present value of project A is +$80, and of project B is +$60, then the net present value of the combined project is:

You are given a job to make a decision on project X, which is composed of three projects A, B, and C which have NPVs of +$50, -$20 and +$100, respectively. How would you go about making the decision about whether to accept or reject the project?

The payback period rule accepts all projects for which the payback period is:

Which of the following capital budgeting methods has the value additive property?