1. If a project has an internal rate of return of 25% and a negative net present value, which of the following statements is true regarding the discount rate used for the net present value computation?

A.The required rate of return must have been 0%.

B.The required rate of return must have been equal to 25%.

C.The required rate of return must have been less than 25%.

D.The required rate of return must have been greater than 25%

E.None of the answer choices is correct.

2. For organizations that do not pay income taxes, the depreciation taken on a long-term asset in future periods:

A.must be multiplied by the tax rate for the IRR and NPV.

B.must be multiplied by one minus the tax rate for the IRR and NPV calculations.

C.is not included in the IRR and NPV calculations.

D.is only included in the payback calculation.

E.None of the answer choices is correct.

3. The appropriate rate to be used for evaluating a long-term investment proposal can be re-ferred to as all of the following except:

A.the required rate of return.

B.the discount rate.

C.the cash flow rate.

D.the hurdle rate.

E.None of the answer choices is correct.

4. To evaluate long-term investments using the net present value approach, future cash flows of these investments must be stated in future value equivalents.

A.True

B.False

5. Post-audits offer an incentive for managers to provide accurate estimates for capital budgeting decisions.

A.True

B.False