What is the effective annual rate of an 11% APR loan compounded semiannually?

11.00%

11.15%

11.30%

11.84%

12.16%

Which of the following is true regarding project evaluation?

Financing costs must be included in the cash flows because they are not accounted for elsewhere.

One should evaluate a project based on its incremental cash flows.

Changes in net working capital are not considered incremental cash flows.

When fixed assets are sold at the project's end, there are usually no tax consequences for the sale.

Whether straight-line depreciation or MACRS is used will have no impact on project NPV.