1. Tools that can be used to determine if an investment is worth putting capital into

   • Capital budgeting
   • Ratio analysis
   • Trends
   • Cash flow analysis

2. Which of the following is an approach used for evaluating investment opportunities?

   • the payback method
   • net present value
   • accounting rate of return
   • All of the above.

3. The present value of the projected future inflows must be greater than the present value of the outflows.

   • True
   • False

4. If you invest $100,000 which returns $20,000 a year, how long would be the payback period be?

   • one year
   • two years
   • five years
   • ten years

5. The ____________ is the sum of all the individuals outflows and/or inflows related to any investment, with each of the individual cash flows discounted to its present value.

   • payback period
   • net present value
   • accounting rate of return
   • growing annuity

6. The only method discussed in this lesson that considers the time value of money.

   • Net present value
   • Payback period
   • accounting rate of return
   • all of the above

7. You must choose only one method in evaluating your projects and investments

   • True
   • False