1. true or false. Under MACRS, the asset is depreciated down to an ending book value equal to the expected salvage price of the asset.

2. True or false. Although discounted payback accounts for the time value of money, it still has the same weakness as payback in that neither technique considers all of the cash flows associated with the project.

3.

The Payback Period for a given capital budgeting project is a measure of which of the following?

Select one:

a.

The rate of return on capital invested in the project

b.

The basic measure if the productivity of invested capital

c.

The amount of time necessary to recapture the initial investment in the project

d.

The total amount of new wealth created by the project

e.

The certainty level that the outstanding loan balances will be repaid prior to the contractual maturity of the loan.

4.

Which of the following is a technique for dealing with a comparison of projects which have unequal length lives?

Select one:

a.

Equivalent Annual Return

b.

Equivalent Annual Cost

c.

Quintile Project Duration

d.

External Rate of Return

e.

Accelerated Cost Recovery System