Question 7 Which of these methods of evaluating projects does not assume proceeds are reinvested to earn further returns? a) Payback method Ob) Net present value c) Internal rate of return d) All of these consider cash flow timing Question 8 What is the third step of the capital budgeting process? a) Generating ideas b) Collection of data c) Evaluation and decision making d) Reevaluation and adjustment Question 9 A firm with a cost of capital of 7% is considering two mutually exclusive projects, one expected to return 9% and a second expected to return 9.5%. Which projects should it pursue? a) The first project with a return of 9% Ob) The second project with a return of 9.5% c) Both projects d) Neither project