MCQ$\text{'}$s

$1.$ Which of the following is the evaluation method that determines how many years it will take to recover the initial cost of the project?

A$.$ Payback period

B$.$ Internal rate of return

C$.$ Breakeven analysis

D$.$ Net present value analysis

$2.$ You have been given the following information on two projects:

$$ Project X has the highest NPV$,$ it is greater than $0,$ and the shortest payback period

$$Project Y has a higher IRR and a positive NPVIf the projects are independent, what would you recommend?

A$.$ Accept project X

B$.$ Accept project y

C$.$ Neither project should be accepted

D$.$ Both projects should be accepted

$3.$ You have been asked to evaluate the following independent projects and give your recommendation. Project A costs $$28,500$ and will bring in $$6,650$ each year for $6$ years. Project B costs $$33,000$ and will bring in $$7,890$ for $6$ years. Cost of capital is $9\%.$

A$.$ Neither project should be chosen

B$.$ Both projects are profitable and should be accepted

C$.$ Project A should be accepted

D$.$ Project B should be accepted

$4.$ You have been asked to evaluate the following independent projects and give your recommendation. Project A costs $$28,500$ and will bring in $$6,650$ each year for $6$ years. Project B costs $$33,000$ and will bring in $$7,890$ for $6$ years. Cost of capital is $9\%.$ What minimum cost of capital would be required to not reject project B$?$

A$.10\mathrm{.}55\%$

B$.9\%$

C$.11\mathrm{.}4\%$

D$.$ I cannot determine with this information$5.$ You have been asked to evaluate the following mutually exclusive projects and give your recommendation. Project A costs $$28,500$ and will bring in $$6,650$ each year for $6$ years. Project B costs $$33,000$ and will bring in $$7,890$ for $6$ years. Cost of capital is $9\%$

A$.$ Neither project should be chosen

B$.$ Both projects are profitable and should be accepted.

C$.$ Project A should be accepted

D$.$ Project B should be accepted

$6.$ Project A has several large cash inflows in time periods $1-3$ and several small cash inflows in time periods $4-6.$ Project B has several small cash inflows in time periods $1-3$ and several large cash inflows in time periods $4-6.$ Explain which project you would recommend based on this information.

$7.$ When could NPV and IRR analyses draw different conclusions?

$8.$ If you are asked to decide between two mutually exclusive projects and the analysis that you've conducted $($NPV$,$ IRR, and payback period$)$ is giving you conflicting answers, which project should you choose?