Answer all of these questions with the right question number next to the correct choice. ANSWER ALL OR NONE

3-The capital budgeting criteria that produces the rate at which NPV = 0 is the:

A)MIRR

B)Payback period

C)IRR

D)NPV

4-If there are conflicts as to project selection when using the four criteria for project selection below, which one should override the others?

A)MIRR

B)NPV

C)Payback period

D)IRR

5-One advantage of using the payback period to evaluate a project is that it:

A)Ignores cash flows from the project occurring after the payback period

B)Is widely used and therefore correct

C)Provides a rough measure of a project's liquidity and risk

D)Is not encumbered by time value of money calculations

6-A firm with a cost of capital of 5% is considering two independent projects with net cash flows as follows. Which project(s) should the firm implement according to the IRR?

	Project 1	Project 2
CF0	($1,000)	($500)
CF1	0	$200
CF2	$1,000	$200
CF3	$12	$150

A)Only project 1

B)Neither project

C)Both projects

D)Only project 2

7-The payback period is:

A)A measure of how soon a project will recoup its initial and all subsequent investments

B)Can be used to determine the value a project adds to the total firm's assets

C)Widely used by managers to evaluate project risk and liquidity, although not recommended by financial theory

D)Considers all of a project's cash flows