14. Assume a $6,500 investment and the following cash flows for two alternatives L$1.000 1,800 1,700 4 2,000 1.300 2,000 1,100 500 Under the payback method, which of the following could be concluded A) Investment X should be selected Investment Y should be selected C. Investment X and Y provide the same payback period. D. The investments are not comparable since they have different time ou buy a new piece of equipment for $7,360, and you receive a cash inflow of $1,000 per year for 10 years. What is the internal rate of return? 496 6% 8% D. 10% 16. The net present value method (NPV) investment projects than the internal rate of return method because the NPV method ) is a more conservative technique for selecting A. assumes that cash flows are reinvested at the project's internal rate of return B. concentrates on the liquidity aspets of investment projects C. assumes that cash flows are reinvested at the firm's weighted average cost of capital D. None of these options are true. 17. If the capital budgeting decision includes a replacement analysis, then A. a gain from the sale of the old asset will represent a tax savings inflow. B. only incremental cash flows should be considered C. the sale price and tax savings will increase the cash inflows throughout the asset's life. D. net present value can no longer be measured in replacement analysis. 18. An equipment replacement decision, under incremental analysis, requires A. calculating the present value of all cash flows associated with the new B. calculating the present valuc of all changes in cash flows from the old equipment to the C. subtracting the purchase price of the old equipment from the purchase price of the new D. Two of the options are correct equipment minus the salvage value of the old asset. new equipiment equipment