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NEW QUESTION: 1
Vanderheiden Inc. is considering two average-risk alternative ways of producing its patented polo shirts.
Process S has a cost of $8,000 and will produce net cash flows of $5,000 per year for 2 years. Process L will cost $11,500 and will produce cash flows of $4,000 per year for 4 years. The company has a contract that requires it to produce the shirts for 4 years, but the patent will expire after 4 years, so the shirts will not be produced after 4 years. Inflation is expected to be zero during the next 4 years. If cash inflows occur at the end of each year, and if Vanderheiden's cost of capital is 10 percent, by what amount will the better project increase Vanderheiden's value?
A. $1,098.89
B. $1,312.31
C. $1,237.76
D. $677.69
E. $1,179.46
Answer: C
Explanation:
Explanation/Reference:
Explanation:
0 k = 10%1234
S
-8,0005,0005,0005,0005,000
-8,000
-3,000
IRR(S) = 16.26%.
NPV(S) = $1,237.76. (extended NPV)
0 k = 10%1234
L
-11,5004,0004,0004,0004,000
IRR(L) = 14.66%.
NPV(L) = $1,179.46.

NEW QUESTION: 2
Which of the following is NOT true for risk management capability maturity level 1?
A. Explanation:
The enterprise with risk management capability maturity level 0 makes decisions without having
much knowledge about the risk credible information. In level 1, enterprise takes decisions on the
basis of risk credible information.
B. Risk management skills exist on an ad hoc basis, but are not actively developed
C. Decisions involving risk lack credible information
D. There is an understanding that risk is important and needs to be managed, but it is viewed as a technical issue and the business primarily considers the downside of IT risk
E. Risk appetite and tolerance are applied only during episodic risk assessments
Answer: C
Explanation:
C, and D are incorrect.
An enterprise's risk management capability maturity level is 1 when:
There is an understanding that risk is important and needs to be managed, but it is viewed as a
technical issue and the business primarily considers the downside of IT risk.
Any risk identification criteria vary widely across the enterprise.
Risk appetite and tolerance are applied only during episodic risk assessments.
Enterprise risk policies and standards are incomplete and/or reflect only external requirements and
lack defensible rationale and enforcement mechanisms.
Risk management skills exist on an ad hoc basis, but are not actively developed.
Ad hoc inventories of controls that are unrelated to risk are dispersed across desktop applications.

NEW QUESTION: 3
Machines that operate as a closed system can NEVER be eavesdropped.
A. True
B. False
Answer: B
Explanation:
Explanation/Reference:
Explanation:
Any data that is transmitted over a network is at some risk of being eavesdropped, or even modified by a malicious person. Even machines that operate as a closed system can be eavesdropped upon via monitoring the faint electromagnetic transmissions generated by the hardware such as TEMPEST.