1 The length of time required for an investment to generate cash flows sufficient to recover the initial cost of the investment is called the: A. B. net working capital period. C. payback period. D. E. discounted payback period cash period. profitability index. 2. A situation in which accepting one investment prevents the acceptance of another investment is called the: A. net present value profile B. operational ambiguity decision. C. mutually exclusive investment decision. D. issues of scale problem. E. multiple rates of return decision. 3. Wilson's Market is considering two projects. Project A has an initial cost of $54,500, ar should produce cash inflows of $28,000 for Years 1 to 3. Project B has an initial cost of S and should produce cash inflows of $30,000 for Years 1 to 3. The required rate of return i percent for Project A and 12 percent for Project B. Which project, or projects, if either, sh accepted and why? A. Project A; because its NPV is positive while Project B's NPV is negative B. Project A; because it has the higher required rate of return C. Project B; because it has the largest total cash inflow D. Pro E. neither projec ject B; because it has a negative NPV which indicates acceptance. t; because neither has an NPV equal to or greater than its initial cost 1 The length of time required for an investment to generate cash flows sufficient to recover the initial cost of the investment is called the: A. B. net working capital period. C. payback period. D. E. discounted payback period cash period. profitability index. 2. A situation in which accepting one investment prevents the acceptance of another investment is called the: A. net present value profile B. operational ambiguity decision. C. mutually exclusive investment decision. D. issues of scale problem. E. multiple rates of return decision. 3. Wilson's Market is considering two projects. Project A has an initial cost of $54,500, ar should produce cash inflows of $28,000 for Years 1 to 3. Project B has an initial cost of S and should produce cash inflows of $30,000 for Years 1 to 3. The required rate of return i percent for Project A and 12 percent for Project B. Which project, or projects, if either, sh accepted and why? A. Project A; because its NPV is positive while Project B's NPV is negative B. Project A; because it has the higher required rate of return C. Project B; because it has the largest total cash inflow D. Pro E. neither projec ject B; because it has a negative NPV which indicates acceptance. t; because neither has an NPV equal to or greater than its initial cost