Question 11 (2 points)

Why do we add depreciation back to profit?

Question 11 options:

a)	A need to focus on cash flows, and depreciation is a non-cash expense

b)	Because deprecation does not impact a projects cash flows

c)	Depreciation is not considered in evaluation projects

d)	None of these

Question 12 (2 points)

In using NPV and/or IRR,

Question 12 options:

a)	Both methods will often accept and reject the same projects

b)	NPV will almost always result in a better decision

c)	IRR will almost always result in a better decision

d)	The drawbacks to IRR mean it should not be used

Question 13 (2 points)

What is the fourth step of the capital budgeting process?

Question 13 options:

a)	Generating ideas

b)	Collection of data

c)	Evaluation and decision making

d)	Reevaluation and adjustment

Question 14 (2 points)

What is the second step of the capital budgeting process?

Question 14 options:

a)	Generating ideas

b)	Collection of data

c)	Evaluation and decision making

d)	Reevaluation and adjustment

Question 15 (2 points)

Small businesses will often use the payback method or a similar less sophisticated approach for all of these reasons except which one?

Question 15 options:

a)	Bankers and finance companies focus on how a loan will be repaid, and how long that will take

b)	Other options, like NPV and IRR, are often out of reach in terms of complexity

c)	Payback helps focus on the most important measure, actual time to repayment

d)	The less sophisticated methods are also easier to use, and available to even those with no finance background.