1. Which of the following are given as steps for using the NPV rule? Select all that apply.

A. Determine the appropriate discount rate

B. Calculate the GDP rate

C. Forecast cash flows

D. Find future value of all the previous cash flows

2. Calculate the NPV of a project with a discount rate of 4% and these cash flows: Period 0: -1000 Period 1: 715 Period 2: 343 Period 3: 269

3.

3. Which of the following statements are true about the payback rule? Select all true statements.

A. It will always agree with the NPV rule.

B. Projects whose cash flows are received sooner will more likely be accepted.

C. It measures the amount of value the project adds to the firm.

D. You do not need to know the discount rate to calculate it.