1. Provide 2 examples of capital investment decisions. Compare the different methods (payback, adjusted return, net present value, internal rate of return) used to make capital investment decisions and the best one from your point of view.

2. Your new firm is operating in an all-cash environment without taxes. You sold $1,000 of inventory for three times the amount you paid for it. The accounting entries you would make for this transaction are: Question 2 options:

A. $1000 increase in cash, $1,000 decrease in inventory

B. $2,000 increase in cash

C. $3,000 increase in cash, $1,000 decrease in inventory, $2,000 increase in accounts receivable.

D. $3,000 increase in cash, $1,000 decrease in inventory, $2,000 increase in retained earnings.