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1. The net present value (NPV) method is considered to be the best method for selecting from among mutually exclusive projects because the NPV method will select the project that:

a. Minimizes income taxes.

b. Has the least risk.

c. Maximizes firm value (i.e., shareholder wealth).

d. Has the largest total (i.e., undiscounted) cash flows.

2. Which method of evaluating capital projects is best for making the accept/reject decision for independent projects?

a. All three methods (NPV, IRR, and MIRR) are equally good for evaluating independent projects because they will always reach the same accept/reject conclusion.

b. NPV.

c. MIRR.

d. IRR.

3. Suppose you are buying your first condo for $145,000, and you will make a $15,000 down payment. You have arranged to finance the remaining $130,000 with a 30-year, monthly payment, amortized mortgage at a 6% nominal annual interest rate, with the first payment due in one month. What will your monthly payments be?

a. $741.77

b. $865.03

c. $798.57

d. $779.42

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92338406

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