1. Multiple internal rates or return occur when:

Select one:

A. The projects cash flows are larger earlier in the life of the project.

B. The projects cash flows are larger later in the life of the project.

C. When the projects cash flows experience normal cash flow streams (i.e. one sign change).

D. When the projects cash flows experience non-normal cash flow streams (i.e. two or more sign changes).

E. When the IRR is equal to the WACC.

2. Which of the following is considered the best method for financial managers when deciding project approval/rejection?

Select one:

A. Payback method

B. Discounted payback

C. NPV

D. IRR

E. MIRR

3. Four of the following statements are truly disadvantages of the regular payback method, but one is not a disadvantage of this method. Which one is NOT a disadvantage of the payback method?

Select one:

A. Lacks an objective, market-determined benchmark for making decisions.

B. Ignores cash flows beyond the payback period.

C. Does not directly account for the time value of money.

D. Does not provide any indication regarding a projects liquidity or risk.

E. Does not take account of differences in size among projects.