9. Payback does not include the following in its analysis:

A. a measure of the change in shareholders wealth.

B. all of the project's cash flows.

C. the time value of money.

D. All of these choices are correct.

10. IRR is:

A. guaranteed to give the right answer.

B. not as good as the Payback method because it's tedious and involved to calculate.

C. not involved in an "NPV Profile".

D. conceptually and mathematically very closely tied to NPV.

11. The most difficult part of the capital budgeting process is:

A. doing the correct calculations.

B. many parts are equally important and difficult.

C. estimating the cash flows involved.

D. choosing which method to use.

12. The relationship between NPV and IRR is such that:

A. both approaches always provide the same ranking of alternative investment projects.

B. if the NPV of a project is negative, the IRR must be greater than the cost of capital.

C. the IRR of a project is equal to the firm's cost of capital if the NPV of a project is $0.

D. None of these choices are correct.