_______ 1. We have two projects A and B that each have a cost of $10,000. Project A has cash flows of $3,250, $3,250, $3,510, $3,510. Project B has cash flows of $800, $770, $4,600, and $9,000. The payback is: PROJECT A PAYBACK = 2.797 YEARs; PROJECT B PAYBACK = 3.654 YEARs. T OR F

______ 2. Using the information from #1, the NPV is $850.52 for A and -1,363.33 for project B. T OR F

______ 3. Net present value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows. T OR F

______ 4. The key assumption behind NPV and IRR is that future cash flows are re-invested at the required rate of return for NPV and at the internal rate of return for the IRR. T OR F

______ 5. The key assumption behind the MIRR model is that cash flows are re-invested at the required rate of return. T OR F. EXPLAIN YOUR ANSWER IN A SENTENCE OR TWO.