Practice More Questions From: The Financial Sustainability of an Infrastructure Project

## Q:

### What is the rate creditors use to discount UFCFs to their present value in order to compute LLCR?

## Q:

### What is the contract where cover ratios are included?

## Q:

### Which cover ratio, if any, is a point-in-time measurement?

## Q:

### Which among the following measurements capture profitability for creditors?

## Q:

### Why is it advisable to calculate the IRR of shareholders on the basis of dividends instead of free cash flows for shareholders? (Select all that apply.)

## Q:

### Which among the following statements is correct? (Select all that apply.)

## Q:

### Consider the following stream of UFCF:

y1: 57.5

y2: 58.8

y3: 61.6

y4: 88.5

y5: 89.1

Compute LLCR at year 0, for an outstanding loan of 200 that pays an annual interest rate of 10% and is repaid in 5 years.

## Q:

### Consider this stream of UFCF:

y1: 57.5

y2: 58.8

y3: 61.6

y4: 88.5

y5: 89.1

Indicate the year in which DSCR is maximum for an outstanding loan of 200 that pays an annual interest rate of 10% and is repaid in 5 years according to this repayment schedule:

y1: 15%

y2: 15%

y3:15%

y4: 25%

y5: 30%

which gives the following stream of principal repayments:

y1: 30

y2: 30

y3: 30

y4: 50

y5: 60

and the following stream of Interest Expenses:

y1: 20

y2: 17

y3: 14

y4: 11

y5: 6

## Q:

### Consider a loan of 200 that pays an annual interest rate of 10% and is repaid in 5 years according to the following repayment schedule:

y1: 10%

y2: 15%

y3: 20%

y4: 25%

y5: 30%.

The loan is made to a moderately risky project expected to generate the following stream of UFCF:

y1: 57.5

y2: 58.8

y3: 61.6

y4: 88.5

y5: 89.1

How would you rate the financial sustainability of the project from the point of view of a creditor?

## Q:

### Consider a loan of 200 that pays an annual interest rate of 10% and is repaid in 5 years according to the the flat repayment schedule:

y1: 20%

y2: 20%

y3: 20%

y4: 20%

y5: 20%.

The loan is made to a moderately risky project expected to generate the following stream of UFCF:

y1: 57.5

y2: 58.8

y3: 61.6

y4: 88.5

y5: 89.1

How would you rate the financial sustainability of the project from the point of view of a creditor?

## Q:

### Which among the following elements is/are necessary to compute DSCR? (Select all that apply.)

## Q:

### Which of the following measures is NOT affected by a change in the loan repayment schedule?

## Q:

### Which of the following measures is NOT affected by a change in the loan repayment schedule?

## Q:

### Which among the following repayment plans is more profitable for creditors?

## Q:

### Which among the following repayment plans is less risky for creditors?

## Q:

### Which among the following statements is correct? (Select all that apply.)

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