1. For a typical capital investment project, the bulk of the investment-related cash outflow occurs:

A) During the initiation stage of the project (i.e., at time period 0).

B) During the operation stage of the project (i.e., after time period 0).

C) Either during the initiation stage or the operation stage.

D) During neither the initiation stage nor the operation stage.

E) Evenly during all three stages: initiation, operation, and final disposal.

2. What is the hurdle rate for average-risk projects?

A) weighted-average cost of capital (WACC)

B) It is determined by the industry a company is in.

C) The prevailing interest rate in the market at that time.

D) 5%

E) Never above 15%.

3. The management accountant at Lang Manufacturing Co. collected the following data in preparation for a life-cycle analysis on one of its products, a leaf blower:

ItemThis YearChange Over Last YearAverage Annual Change Over the Last Four YearsAnnual sales$ 2,700,000+ 1.8%+ 23.5%Unit sales price450+ 2.4%+ 8.3%Unit profit100 1.0%+ 3.0%Total profit600,000 1.2%+ 30.0%

The stage of the sales life cycle the product is in is:

A) Introduction.

B) Growth.

C) Maturity.

D) Decline.

E) Withdrawal.