1) Which of the following is true with regards to special cases in capital budgeting?

O The equivalent annual cost (EAC) is used to evaluate mutually exclusive projects with different economic lives if the projects are expected to be continuously replicated.

O In a cost-cutting proposal the reduction in costs has the same effect as an increase in depreciation.

O Setting the bid price requires finding the sales price point at which the project's IRR is equal to the crossover point.

O Setting the bid price requires finding the sales price point at which the project NPV is equal to the IRR

2) Calculate the NPV of the following project cash flow using a discount rate of 6%: Yr 0 = $-900; Yr 1 = $-80; Yr 2 = $100; Yr 3 = $300; Yr 4 = $500; Yr 5 = $500 -$135.09 - $420.00 - $-180.78 - $2.086.03