Question $1(1$ point$)$

Which method provides correct rankings of mutually exclusive projects, when the firm is not subject to capital rationing.

Question $1$ options:

profitability index

payback period

net present value

internal rate of return

Question $2(1$ point$)$

Which of the following investment rules does not use the time value of the money concept?

Question $2$ options:

Internal rate of return

The payback period

All of the options use the time value concept

Net present value

Question $3(1$ point$)$

If the net present value of project A is $+$$$80,$ and of project B is $+$$$60,$ then the net present value of the combined project is:

Question $3$ options:

$$80$

$$60$

$$140$

$$20$

Question $4(1$ point$)$

You have three mutually exclusive projects: A$,$ B$,$ and C$.$ They have NPVs of $+$$$50,-$$$20$ and $+$$$100,$ respectively. What should you do$?$

Question $4$ options:

Accept A

Accept B

Accept C

Accept A and C

Question $5(1$ point$)$

Which of the following capital budgeting methods has the value additive property?

Question $5$ options:

IRR

Payback Period

Discounted Payback Period

NPV

Question $6(1$ point$)$

The IRR is defined as:

Question $6$ options:

The discount rate that makes NPV equal to zero

The difference between the cost of capital and the present value of the cash flows

The discount rate used in the NPV method

The discount rate used in the discounted payback period method

Question $7(1$ point$)$

Profitability index is the ratio of:

Question $7$ options:

Present value of cash flow to initial investment

Net present value of cash flow to IRR

Net present value cash flow to initial investment

Present value of cash flow to IRR