14) The Net Present Value:

a) Calculated by discounting all cash flows to the present & subtracting the outflows

b) Calculates the rate of return which leaves you indifferent between undertaking the project, and not undertaking the project.

c) Leads to the same decisions as the use of the payback period.

d) Would suggest that we accept projects with a negative net present value.

15) The Internal Rate of Return for a project:

a) Solves for the interest rate that makes the net present value zero.

b) Is a special case of the net present value method.

c) Accepts or rejects a project based on a comparison of the IRR with the cost of capital of the project

d) All of the above answers are correct.