1. Which evaluation tool always leads you to the correct decision?
   1. Average Accounting Return.
   2. Payback.
   3. Internal Rate of Return.
   4. Net Present Value.
2. If I have limited capital and have to choose how create the most value with the money in my budget, which tool will be the most useful in narrowing down which projects to invest in?
   1. Net Present Value
   2. Internal Rate of Return.
   3. Payback.
   4. Profitability Index.
3. Any changes to a firm's projected future cash flows that are caused by adding a new project are referred to as:
   1. eroded cash flows.
   2. deviated projections.
   3. incremental cash flows.
   4. directly impacted flows.
   5. opportunity cash flows.
4. Which of the following should not be included when analyzing a new project:
   1. inventory purchased at the beginning of the project.
   2. fees paid to a consultant to evaluate the viability of the project.
   3. fixed assets sold at the end of the project.
   4. all of the above should be included.
5. Chris purchased an investment for $2,450 and sold it 4 years later for $3,489. What was Chris return? Show work for partial credit. (5 points)
   1. 9.56%
   2. 7.17%
   3. 9.24%
   4. 8.13%