1.The time value of cash inflows and outflows are totally ignored in:

a.payback period method

b.net present value method

c.internal rate of return method

d.accounting rate of return method

2. Which of the following statements concerning the discounted payback period, is NOT true?

a.The discounted payback period shows the profitability of competing projects.

b.It accounts for the time value of money.

c.The discounted payback period ignores cash flows after the payback point has been reached.

d.The discounted payback period measures the time that a project will take to generate enough cash flows to cover the initial investment.

3./ Internal Rate of Return is used:

a.to determine which investment to choose when one of two alternatives must be chosen.

b.to choose an investment that necessary to preserve the operation of the business.

c.to determine the interest rate for an investment that yields no income.

d.to determine the interest rate at which benefits of a project are equivalent to its costs

4.Projects with...............are preferred.

a.Lower payback period

b.Equal payback period

c.Flexible payback period

d.Higher payback period