1.

Which of the following is NOT essential to sort good and bad projects?

• Incorporating the required rate of return of the project.
• Considering time value of money.
• Including all cash flows of the project.
• All of the above are essential criteria.
• None of the above are essential criteria.

2.

A firm is considering replacing a fully-depreciated old plant with a new plant on vacant land the firm already owns. Which of the following should be included in the firms cash flow projections?

• A. The original cost of the vacant land.
• B. The price of the vacant land in the current market.
• C. The salvage value of the old plant.
• D. The depreciation on the new plant.
• E. B through D.