No 9.

Which one of the following best expresses two mutually exclusive investments? A Locating a restaurant inside a theatre building B Building either a gas station or a restaurant on a corner lot C Constructing a theatre and a restaurant side by side D Building a parking lot for the beneft of both restaurant and theatre patrons E Building both a restaurant and a parking lot on a vacant lot

No 8.

The net present value: A is directly related to the discount rate. B method of analysis cannot be applied to mutually exclusive projects. C is unaffected by the timing of an investment's cash flows. D is equal to the initial investment when the internal rate of return is equal to the required return. E decreases as the required rate of return increases.

No 7.

The net present value rule states that you should accept a project if the NPV: A is positive. B exceeds the initial cost. C exceeds the required rate. D is less than 1.0. E is equal to zero or negative.

No 6.

Which one of the following statements is correct? A The EAR is always greater than the APR. B The APR is equal to the EAR for a loan that charges interest monthly. C The EAR, rather than the APR, should be used to compare both investment and loan options. D The APR is the best measure of the actual rate you are paying on a loan. E The APR on a monthly loan is equal to (1 + monthly interest rate 12 - 1.