1. The capital budgeting decision depends in part onthe
A. availability of funds.
B. relationships among proposed projects
C. risk associated with a particularproject
D. all of these answers are correct

2. The payback period is often compared to an asset’s
A. warranty period.
B. net present value
C. internal rate of return
D. estimated useful life

3. When using the cash payback technique, the paybackperiod is expressed in terms of
A. dollars
B. years
C. a percent
D. months

4. The primary capital budgeting method that usesdiscounted cash flow techniques is the
A. profitability index method.
B. annual rate of return method.
C. net present value method
D. cash payback technique.

5. A company's cost of capital refers to the
A. cost of printing and registering commonstock shares.
B. total cost of a capital project.
C. rate of return earned on commonstock.
D. rate the company must pay to obtainfunds from creditors and stockholders.