a. C. 1. Assuming a company uses a risk-adjusted cost of capital of 7.5%, which of the following is most likely to be correct? The payback period calculation is considered complicated and normally only used by finance and accounting experts b. The payback period calculation ignores cash flows beyond the payback period. Assuming you have a 'cut-off' of 3 years for payback periods (i.e. you only accept projects with payback periods below 3 years), switching from a regular payback calculation to a discounted payback period will reduce the number of projects you find acceptable. d. If you have to choose just one investment from several, NPV, IRR and MIRR will always lead to the same choice (assuming that there are not multiple IRRs) For a given series of cash flows, when calculating decision measures such as NPV, IRR and MIRR, there will be one unique NPV, one unique IRR and one unique MIRR. Those measures will also make the same independent investment decision. (i.e. if NPV indicates the project is a good one, so will IRR and MIRR) e. 2. You are evaluating a potential investment which has an IRR of 8%. The company WACC, which is used to compute NPV, is 10%. The company's reinvestment rate, used to compute MIRR is 11%. Which of the following is true? a. The MIRR is higher than 8%. The NPV is negative. b. The MIRR is lower than 8%. The NPV is negative. The MIRR is higher than 8%. The NPV is positive. d. The MIRR is lower than 8%. The NPV is positive. C