Multiple Choices

1) Which of the following capital budgeting techniques account for the time-value of money? marks) a) NPV b) Profitability Index (PT) c) Both a) and b) d) Neither a) nor b) 2) A project can show a positive projected accounting profit but still have a negative NPV (2 marks) a) True b) False 3) Which of the following capital budgeting techniques is the most closely related to NPV? (2 marks) a) Payback Period b) Profitability Index c) Total Cost of Ownership d) Accounting Rate of Return 4) If a project earns its IRR, then the NPV of that project will be 50. (2 marks) a) True b) False 5) If the NPV of a project is equal to zero, then the project would fails to earn the required rate of return (ie the discount rate used to discount the cash flows). (2 marks) a) True b) False