91 . Which of the following statements concerning Board committees is least accurate?
A) The nominations committee is responsible for recruiting qualified board members and preparing an executive management succession plan.
B) Members of the audit committee should be independent experts in accounting and finance.
C) The audit committee has authority over the procedures used to audit the entire corporate group including subsidiaries and affiliates.
92 . Which of the following statements regarding the net present value (NPV) and internal rate of return (IRR) is least accurate?
A) For independent projects, the internal rate of return IRR and the NPV methods always yield the same accept/reject decisions.
B) For mutually exclusive projects, you must accept the project with the highest NPV regardless of the sign of the NPV calculation.
C) The NPV tells how much the value of the firm will increase if you accept the project.
93 .Which of the following statements related to corporate governance is least accurate?
A) It is desirable for the chairman of the board to be the firm’s current CEO or former CEO.
B) Board members should not have any material relationships with the firm’s advisers, auditors, and their families.
C) It is desirable for board members to have board experience with other boards.
94 . Which of the following statements about the internal rate of return (IRR) for a project with the following cash flow pattern is CORRECT?
§ Year 0: -$ 2,000
§ Year 1: $10,000
§ Year 2: -$ 10,000
A) No IRRs can be calculated.
B) It has a single IRR of approximately 38%.
C) It has two IRRs of approximately 38% and 260%.
95 . Which of the following projects would most likely have multiple internal rates of return (IRRs)? The cost of capital for all projects is 10.0%.
Cash Flows South East West
CF0 -15,000 -12,000 -8,000
CF1 10,000 7,000 4,000
CF2 -1,000 2,000 0
CF3 15,000 2,000 6,000
A) Projects East and West.
B) Projects South and West.
C) Project South only.
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