1. Which of the following can result in an increase in firm value?
I. Reducing net capital expenditures on existing assets
II. Increasing the reinvestment rate of the firm
III. Improving operating margins on existing assets
a. I only
b. I and II only
c. I and III only
d. II and III only
e. I, II, and III only
f. None of the above
2. How does CFROI differ from the internal rate of return (IRR)?
I. CFROI uses both past and future cash flows to evaluate projects
II. CFROI is a rate of return, while IRR is a percentage
III. CFROI tends to fade toward the cost of capital over time
A. I only
B. II only
C. III only
D. I and II only
E. I and III only
F. I, II, and II