1. If a project has a positive net present value, its internal rate of return will exceed the firm's hurdle rate.

true or false

2.If the net present value for a capital investment is equal to zero, the internal rate of return for the investment is equal to the required rate of return. true or false

3.Cash inflows from a capital investment may include the terminal value of capital assets and increases in revenues. true or false

4.Generally, a company should use the MACRS method to calculate depreciation on its income tax return, due to the effects of the time value of money. true or false

5.The assumption regarding ordinary annuities is that cash flows occur at the end of each period. true or false

6.In performing capital budgeting analysis that takes time value of money into account, cash flows generated by a capital project are assumed to be reinvested at the project's rate of return. true or false

7. The amount of the depreciation tax shield can be calculated by multiplying the amount of depreciation expense by the tax rate. true or false

8.The unadjusted rate of return is found by dividing the average incremental increase in annual operating income by the cost of the investment. true or false

9.Matt needs to compute the present value of $5,000 to be received four years from now. He should multiple $5,000 by the appropriate present value interest factor obtained from the present value of $1 table. true or false

10.Generally, the unadjusted rate of return should be calculated based on the average investment rather than the amount of the original investment in a depreciable asset such as equipment. true or false

11.Sources of cash inflows from capital investments include incremental expenses and installation costs. true or false

12.The future value of $1 table should be used to discount lump sum cash flows expected to occur in the future. true or false