2008 CFA Level 1 － Sample 样题(3)－Q44 face, only, difference, investment, between

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44、An analyst is developing net present value (NPV) profiles for two investment projects being considered by a company. The only difference between the two projects is that Project 1 is expected to receive larger cash flows early in the life of the project, while Project 2 is expected to receive larger cash flows late in the life of the project. Compared to Project 1, which of the following best describes the:

       slope of the NPV profile for Project 2?    sensitivity of the NPV for Project 2 to

changes in the company's cost of capital?

A.   Flatter    Less sensitive

B.    Flatter    More sensitive

C.   Steeper  Less sensitive

D.   Steeper  More sensitive

A. Answer A

B. Answer B

C. Answer C

D. Answer D

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答案和详解如下：

44、Correct answer is D

"Capital Budgeting," John D. Stowe and Jacques R. Gagné

2008 Modular Level I, Vol. 4, pp. 21-25

Study Session 11-44-e

explain the NPV profile, compare and contrast the NPV and IRR methods when evaluating independent and mutually exclusive projects, and describe the problems that can arise when using an IRR

All else equal, a delay in the receipt of cash flows will make a project's net present value more sensitive to changes in the discount rate; the increased sensitivity is illustrated by a steeper slope in the net present value profile.

 

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