1)

The time it will take to recoup in the form of cash inflows the initial dollars invested in an investment project is called the _____.

A) payback period

B) accounting rate of return

C) internal rate of return period

D) recovery period

2)

The internal rate of return model determines the ______ at which the net present value of an investment project equals ________.

A) cost of capital; a positive number

B) hurdle rate; a positive number

C) interest rate; zero

D) discount rate; a positive number

3)

Accepting a project with a _____ NPV makes the firm worse off financially because the cost of the investment exceeds the ________.

A) positive; present value of future benefits

B) negative; present value of future cash flows

C) negative; present value of present cash flows

D) positive; present value of future cash flows

4)

As the minimum required rate of return increases for an investment project, the net present value of the project _____.

A) incearses

B) does not change

C) decreases

D) becomes positive

5)

The present value of tax savings from depreciation deductions from an accelerated depreciation method will be _____ those from the straight-line method.

A) the same as

B) greater than

C) less than

D)none of the above