A Statements a and b are correct. B- Statements a and b are incorrect. C - Statement a is correct, the latter being incorrect. D-Statement a is incorrect, the latter being correct. 1. a. B-C ratio reflects the profitability of a certain project. b. B-C ratio can be 0. 2. a. The payback period method doesn't account the time value equivalent of money. b. In payback period method, the salvage value is not accounted because it is not considered a revenue. 3. a. In MARR analysis of a given project for n study period and i% rate, if AW is positive, so should PW and FW. b. If AW is positive in a given project for n study period and i% rate, then FW = PW(1 + i)- = AW(A/F, i%,n). 4. a. If no cash outflow is attributable to a certain project, then ERR Method is impossible. b. The interest rate external to a project in ERR Method must always be less than or equal to MARR. 5. a. The B-C Ratio using conventional method is always greater than B-C Ratio using modified method. b. If the project has no annual maintenance and operational costs, then B-C conventional = B-C modified. 6. a. A B-C Ratio of 1.085 and PW = 0 means that the project is beneficial only, but not profitable. b. In simple payout period, only the salvage value is considered to have a time value. 7. a. The market value is not considered in payback period analysis since it usually goes beyond the study period. b. It is only an assumption that salvage value is not considered in payback period analysis. 8. a. Liquidity alone cannot fully justify a project, nor profitability alone. b. MARR is the true measure of rate of return of a project. 9. a. For a project, a payback period greater than the study period is often desirable. b. B-C Ratio cannot be negative. 10. a. The amount of profit reflects the benefit of a certain project. b. Likewise, the benefit of a project reflects the profit in cash that can be collected from a project.