Online Access Free FIN Exam Questions
| Exam Code: | FIN |
| Exam Name: | Finance |
| Certification Provider: | CPA |
| Free Question Number: | 80 |
| Posted: | May 30, 2026 |
A UK based company is due to receive US$6,000,000 in three months from its American customer. It wants to hedge this receipt and has found an appropriate futures market based in the USA, where the value of one futures contract is EUR62,500. The current futures price is US$1.7778 per UK sterling.
How many contracts would the company buy or sell in order to hedge the exposure?
When projects are appraised using discounted cash flow methods, two approaches to dealing with inflation could be used. These are:
1.To exclude inflation from the estimated future cash flows and to apply a discount rate based on the money cost of capital.
2.To include inflation in the estimated future cash flows and to apply a discount based on the real cost of capital.
Which ONE of the following combinations (true/false) is correct?
Indus Co holds an item of inventory for which the demand is 40,000 units per year. The cost of holding one unit of the item is $2*50 per year and the cost of placing an order for the item is $20. Demand for the item is even throughout the year. Indus Co employs the economic order quantity (EOQ) model to derive the optimal order quantity for the item.
What is the combined annual cost of holding and ordering this item?
Kubilai Co, a listed company, is considering issuing additional equity capital. To ensure that all the new equity shares are sold, Kubilai Co wants to gain assurance that any shares not bought by the general public will be subscribed.
What term correctly describes a firm which agrees to subscribe for the equity shares which are not taken up?
A company is considering a project for investment which will cost $70,000 now and another $10,000 in year five.
The company has a cost of capital of 8%. The project has the following discounted cash flows:
YearDiscounted Cash Flows $ 123,148 230,007 319,846 414,701
What is its discounted payback period in years and months (to the nearest month)?