Financial Decision Making
FACULTY OF BUSINESS
SCHOOL OF ECONOMICS AND FINANCE
BAFI-1100 FINANCIAL DECISION MAKING
FIRST SEMESTER 2004
1. This is a CLOSED BOOK EXAMINATION
2. The examination represents 60% of the assessment in this subject.
3. All answers are to be made on the examination paper.
4. All questions should be attempted; there is no choice between questions
5. The use of a calculator is permitted, however laptop computers are not permitted to be brought into the examination room.
6. Students are advised to show all workings for questions involving calculations.
(a) Consider an investment that has cash flows of $500 at the …show more content…
a. D2001 = $2.01. D2002 = $2.31. D2003 = $2.66. D2004 = $3.06. D2005 = $3.52.
c. 2001 5.10% 6.90%
2006 7.00% 5.00%
(4 + 4 + 6 + 2 + 2 +2 = 20 marks)
(a) What is business risk?
(b) What factors influence a firm's business risk?
(c) From a company’s point of view, is it riskier for it to borrow on