1. (TRUE or FALSE?) If a project has an NPV of zero, it means that the firms overall value will decrease if the new project is adopted.

2. (TRUE or FALSE?) One of the problem with the net present value method is that, in rare cases, a project may have more than one NPV, or no NPV at all.

3. (TRUE or FALSE?) If a project is independent and the IRR greater than the firm's hurdle rate, NPV is greater than 0.

4. (TRUE or FALSE?) NPV is the present value of the project's cash flows, discounted at the firm's required rate of return, less the cost of the initial investment.

5. (TRUE or FALSE?) The change in firm value due to taking on a capital budgeting project will be always positive.

6. (TRUE or FALSE?) The change in firm value due to taking on a capital budgeting project may be positive, negative, or zero, depending on the NPV value.

7. (TRUE or FALSE?) The accounting rate of return (ARR) is consistent with the goal of maximizing stockholder value.

8. (TRUE or FALSE?) The discount rate and NPV are positively related.

9. (TRUE or FALSE?) The project from the mutually exclusive list with the lowest positive NPV should be ranked first, the next lowest should be ranked second, and so on.

10. (TRUE or FALSE?) All independent projects with NPVs greater than or equal to zero should be accepted because all such projects will add to the value to the firm.