1-The accounting rate of return (ARR) is also called a- Average rate of return

b- Profitability index

c- Net present value

d- Internal rate of return

2-What does net present value give? a- Present value of future cash flows

b- Future values of future cash flows

c- Future values of present cash flows

d- Present value of present cash flows

3-In the context of agency theory, the agents are the: a- Customers

b- Shareholders

c- Auditors

d- Managers or directors

4-Which of the following methods uses accounting profit rather than cash flows as basis for calculation? a- Average rate of return

b- Internal rate of return

c- Payback period

d- Net present value

5-The average length of time required to convert raw materials into finished goods and then to sell those goods is called: a- Receivable collection period

b- Average payment period

c- Payables payment period

d- Inventory conversion period