Question 1a)

Project A has annual cash flows of $200.00 for the next three years. Project B has annual cash flows of $100.00 for the next three years and then annual cash flows of $500.00 for the following four years. Assuming both projects have an initial cost of $500.00, which project is better based on the payback period criteria?

	Project A
	Project B

	Cannot be determined without discount rates for each project
	Both projects have the same payback period

Question 1b)

A project having a payback period of 4.73 years implies ____.

	the NPV is greater than zero
	the NPV is less than zero

	the NPV equals zero
	nothing about the NPV

Question 1c)

If the IRR of a project is equal to the discount rate of the project then ____.

	the PI is zero
	the payback period is zero

	the NPV is zero
	the present value payback period is zero

Question 1d)

A project generates a revenue of $100.00 today for a service to be performed one year from today at a cost of $110.00. Which discount rate will make the NPV greater than zero?

	8%
	9%

	10%
	11%

Question 1e)

What is the IRR for a project that has an initial cost of $400.00 and produces a revenue of $452.00 one year from today? (Hint: calculate the return on the investment)

	11% APR
	12% APR

	13% APR
	14% APR