9. Why might a firm choose to accept a long-term investment even if the net present value is below zero?

10. What might cause a manager to reject a long-term investment even though the net present value is positive?

11. Describe the two steps required to calculate net present value and internal rate of return when using Excel.

12. What is the payback method, and why do managers use this method?

13. What are the two weaknesses associated with the payback method?

14. Refer to What method of evaluating long-term investments is most popular? Why do you think the payback method is the least-used method?

15. What does the term working capital refer to, and how does working capital affect the evaluation of long-term investments?

16. Assume a company pays income taxes. How are revenue and expense cash flows adjusted for income taxes when calculating the net present value?

17. Assume a company pays income taxes. How does depreciation expense affect cash flows even though it is a noncash expense?