QUESTION 12 The internal rate of retur (IRR) technique assumes that cash flows are reinvested at the a. firm's expected rate of return b.risk-free rate of return c. firm's opportunity rate of return O d. project's internal rate of return (IRR) e.market rate of return QUESTION 13 Oa. Which of the following statements concerning cash flow evaluation in capital budgeting is correct? The relevant marginal cash flows associated with a project include depreciation, because it is an annual operating expense that requires a cash payment The sunk costs associated with an investment proposal are relevant cash flows for capital budgeting analysis that should be included in the computation of the project's initial investment outlay. Oc Shipping and installation charges are deducted from the purchase price of an asset to compute its depreciable basis. When determining a project's terminal cash flows, it is generally assumed that the firm's operations do not return to the same level as they were before the project was purchased. Even though it is a noncash expense, a capital budgeting project's depreciation expense must be computed because it o e. affects the after-tax cash flows of the project d. With the improvement in the technology and understanding of discounting techniques, both the net present value (NPV) technique and internal rate of return (IRR) technique used in capital budgeting analyses have become more popular because these techniques provide decisions that help the firm to a. minimize its overall payback period b.maximize its value c. maximize the initial capital investment d. minimize the number of multiple IRRs computed for every project e.maximize it required rate of return QUESTION 10 Which of the following capital budgeting evaluation techniques is based on the concept that it is better to recover the cost of investment in a project sooner rather than later? a. Net present value (NPV) O b. Modified internal rate of return (MIRR) c. Internal rate of return (IRR) d. Present value (PV) of cash flows Oe. Traditional payback period (PB)