Which of the following is NOT an important step in the financial evaluation of an investment opportunity? A. Calculate a figure of merit for the investment. B. Estimate the accounting rate of return for the investment. C. Estimate the relevant cash flows. D. Compare the figure of merit to an acceptance criterion. E. All of the above are important steps.

Which of the following figures of merit does not directly take into consideration the time value of money? I. Payback period II. Internal rate of return III. Net present value (NPV) IV. Accounting rate of return A. IV only B. I & III only C. II & III only D. I & II only E. I & IV only F. I, II, III, and IV

Ian is going to receive $20,000 six years from now. Sunny is going to receive $20,000 nine years from now. Which one of the following statements is correct if both Ian and Sunny apply a 7-percent discount rate to these amounts? A. The present values of Ian and Sunnys monies are equal. B. In future dollars, Sunnys money is worth more than Ian's money. C. In todays dollars, Ians money is worth more than Sunnys. D. Twenty years from now, the value of Ians money will be equal to the value of Sunnys money. E. Sunnys money is worth more than Ians money given the 7-percent discount rate. F. None of the options are correct.