1. Which of the following is a disadvantage of the payback method?

A. It ignores the time value of money

B. It ignores cash flows beyond the payback period.

C. All answers are correct.

D. It is inconsistent with the goal of maximzing shareholder wealth.

2. How is a current expenditure different from a capitalized expenditure?

A. Both a current expenditure and a capitalized expeneiture are espense items that are included on the income statement.

B. There is no difference between a current expenditure and a capitalized expenditure.

C. A current expenditure is expensed on the income statement , while a capitalized expenditure is included on the balance sheet as a long term tangible asset

D. A current expenditure is included on the balance sheet as long term tabgible asset while a captilized expenditure is expensed on the income statement

true or flase

The IRR method of analyzing a capital expenditure determines how much the present value of the cash inflows exceeds the present value of costs