1. Which capital budgeting decision rule is sometimes used as a screening device for projects when the firm has capital constraints or liquidity concerns?

A. NPV

B. IRR

C. Payback

2. According to the IRR decision rule, a project should be accepted if its IRR is greater than _____.

A. Zero

B. the PV of future cash flows

C. the T-BIll rate

D. the required rate of return

3. One defect of the IRR method versus the NPV method is that there can be multiple IRRs if the project cash flows have multiple sign changes.

A. True

B. False