1. Partnerships have the ability to raise large quantities of cash by selling stocks and bonds.

True

False

2. The statement of cash flows is based on the comparison of two consecutive balance sheets.

True

False

3. Which of the following statements is false?

1) the IRR investment rule will identify the correct decision in many, but not all, situations

2) by setting the NPV equal to zero and solving for r, we find the IFF

3) if you are unsure of your cost of capital estimate, it is important to determine how sensitive your analaysis is to errors in this estimate

4) the simplest investment rule is the NPV investment rule