Multiple Choice For each of the questions below write down the letter of the most appropriate answer eg 1. Which of the following is a disadvantage of using the payback to evaluate investments ? a) It is a rough measure of the uncertainty of future cash flows b) It ignores the cash inflows beyond the payback period c) It ignores the time value of money d) Both B and C 2. Using Net Present Value, an investment is rejected if the NPV is a) Equal to zero b) Positive c) Negative d) Greater than the cost of the capital 3. Using IRR, a project is rejected if the IRR... a) Is less than the required rate of return b) Is equal to the required rate of return c) Is greater than the cost of capital d) is greater than the required rate of return 4. An investment of R10 000 produces a net cash inflow of R6 000 in the first year and R20 000 in the second year. The payback period is a) 1 year 8 months b) 6 months c) 2 years d) 1 year 2 months 12 days 5. An investment of R10 000 provides an average net profit of R18 000 with a salvage value of R10 000. The accounting rate of return using the average investment is.... a) 18% b) 20% c) 36% d) 32.73%