QUESTION 6 A net present value of zero implies that an investment: a has an initial cost of zero. b. has cash inflows which have a zero present value. e does not add or subtract from the company's value or shareholders' investment. Od does not payback its initial cash outlay. QUESTION 7 Which one of the following statements is correct concerning the payback rule? O a The payback period is computed using the future value of each of the cash flows. 6. The rule says that you should accept a project if the payback period is greater than 1.0. c. The rule is biased in favor of long-term projects. d. The rule is flawed because it ignores all cash flows after some arbitrary standard of time. QUESTION 8 The payback period rule works best in evaluating which one of the following? O a low cost project which never pays back O b. low cost project which have a short time frame that pays back rapidly c high cost project with equal cash inflows over a long period of time O d. high cost project with increasing cash inflows over time QUESTION 9 Payback ignores the a initial cost of a project b. time value of money. Os time period in which a cash flow occurs. O d. liquidity of a project QUESTION 10 What is the net present value of a project which has an initial cost of $50,000 and produces cash inflows of S15,000 a year for 5 years if the discount rate is 12 percent? a $2,998.41 O b.$3,602.13 O c $4.071.64 O d. $5,754.29