Discounted cash flow

Discounted cash flow

MCQs on Discounted Cash Flow (DCF), focusing on key concepts like Net Present Value (NPV), Internal Rate of Return (IRR), and discounting:

1 / 10

One potential flaw of the Discounted Cash Flow (DCF) method is:

2 / 10

In the DCF formula, the terminal value is highly sensitive to changes in which factor?

3 / 10

Which of the following factors is NOT commonly included in a DCF sensitivity analysis?

4 / 10

The Weighted Average Cost of Capital (WACC) is used in a DCF model to:

5 / 10

What is the purpose of Terminal Value (TV) in a DCF analysis?

6 / 10

In a DCF model, which of the following is typically used as a proxy for cash flows?

7 / 10

As the discount rate increases in a DCF analysis, what happens to the present value of future cash flows?

8 / 10

Which of the following best describes Internal Rate of Return (IRR)?

9 / 10

If a project has a positive NPV, it indicates that:

10 / 10

The Discounted Cash Flow (DCF) method is primarily used to:

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