1)

i . Which of the following are given as steps for using the NPV rule? Select all that apply.

a)Calculate the GDP rate

b)Forecast cash flows

c)Findfuturevalue of all the previous cash flows

d)Determine the appropriate discount rate

ii. Which of the following statements are true about the payback rule?Select all true statements.

a) It will always agree with the IRR rule.

b) You need to know the discount rate to calculate it.

c) It is based on the notion that an opportunity that pays back the initial investment quickly is the best idea.

d) Projects whose cash flows are received sooner will more likely be accepted.

iii. Which of the following statements are true about using the internal rate of return (IRR)?

a) You must know the discount rate to compute the IRR.

b) It measures the amount of value the project adds to the firm.

c) IRR is defined as the discount rate at which the future value of the project's cash flows is one million.

d) A project can have more than one IRR.

iv) Which of the following is a reason to choose NPV over IRR if they conflict?

a) IRR directly measures the increase in value to the firm.

b) IRR will always be lower.

c) IRR may be unreliable when you have unconventional cash flows and mutually exclusive projects.

d) NPV is an internal measure of profitability whereas IRR is an external measure of profitability.

v) What is the formula for profitability index?

a) Initial Investment/PV(benefits)

b) NPV/Initial Investment

c) PV(benefits)/Initial Investment

d) Initial Investment/NPV

vi) Machinery costs $1 million today and $100,000 per year to operate.It lasts for 2 years.What is the equivalent annual annuity if the discount rate is 7%?Enter your answer in dollars and round to the cent.negative sign for cash flow