True or False?

1. An arithmetic gradient refers to cash flows whose values change by the same percentage at each period of interest.

2. At ABC Company, fixed costs amount to $1.5 million per year. The company's main product results in revenue of $8.50 per unit and variable costs of $4.25 per unit. If its production level is 200,000 units per year, the company makes a loss of $650,000 per year.

3. Using the payback without return (or interest) method to evaluate the best solution may lead to the selection of a solution that is different from the one that will be selected by an analysis that uses the net present value method.

4. The internal rate of return is defined as the interest rate paid on the principal of a loan or investment.