Which one of the following is a project acceptance indicator given an independent project with investing type cash flows?

Net present value:    A.  is the best method of analyzing mutually exclusive projects. B.  is less useful than the internal rate of return when comparing different sized projects. C.  is the easiest method of evaluation for non-financial managers to use. D.  is less useful than the profitability index when comparing mutually exclusive projects. E.  is very similar in its methodology to the average accounting return. Refer to section 9.1

18.

Which one of the following is a project acceptance indicator given an independent project with investing type cash flows?    A.  profitability index less than 1.0 B.  project's internal rate of return less than the required return C.  discounted payback period greater than requirement D.  average accounting return that is less than the internal rate of return E.  modified internal rate of return that exceeds the required return Refer to sections 9.3 through 9.6

19.

Why is payback often used as the sole method of analyzing a proposed small project?    A.  Payback considers the time value of money. B.  All relevant cash flows are included in the payback analysis. C.  It is the only method where the benefits of the analysis outweigh the costs of that analysis. D.  Payback is the most desirable of the various financial methods of analysis. E.  Payback is focused on the long-term impact of a project. Refer to section 9.2

20.

Which of the following are advantages of the payback method of project analysis? I. works well for research and development projects II. liquidity bias III. ease of use IV. arbitrary cutoff point    A.  I and II only B.  I and III only C.  II and III only D.  II and IV only E.  II, III, and IV only Refer to section 9.2