1. The net present value for a project with a relatively long life is more sensitive to changes in the required rate of return than the net present value for a project with a relatively short life because:

a. The internal rate of return is greater the longer the term of a project

b. Distant cash flows are more uncertain

c. A change in the discount rate has a much greater impact on more distant

2. The accounting rate of return technique should strictly not be used in capital budgeting as its is an accounting method.

a. True

b. False