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1. Which of the following is NOT a shorting coming of different capital budgeting techniques? A. Profitability index tends to bias towards small investment projects.

1. Which of the following is NOT a shorting coming of different capital budgeting techniques?

A. Profitability index tends to bias towards small investment projects.

B. IRR tends to bias towards small investment projects.

C. IRR ignores the time value of money.

D. Payback ignores the cash flow after the payback period.

2. What is the current price of a 4-year semi-annual bond with a face value of $1000 and a coupon rate of 6%? Assume the current interest rate is 5%.

A.

$1035.85

B.

$1056.33

C.

$1089.12

D.

$1000.00

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