Question 1 Dividend payment policy is a form of capital budgeting policy financing policy working capital policy dividend reinvestment policy Question 2 The approach is used to convert the net present value of unequal-lived projects into an equivalent annual amount (in net present value terms). internal rate of return investment opportunities schedule risk-adjusted discount rate annualized net present value Question 3 The prime rate of interest fluctuates with the changing supply-and-demand relationship for long-term funds the changing supply-and-demand relationship for short-term funds the liquidity requirement in a money market the demand in a bond market Question 4 When evaluating a capital budgeting project, installation costs of a new machine must be considered as part of the operating cash inflows the initial investment the incremental operating cash inflows the operating cash outflows