1. is generally upward sloping

2. None of the above

3. displays Fisher‘s rate of intersection

4. displays the expected NPV for a project at a variety of different discount rates

1. The discount rate that gives an NPV of zero is the project‘s IRR.

2. The IRR is the discount rate that equates the present value of the cash inflows with the present value of outflows.

3. For mutually exclusive projects, if the NPV method and the IRR method give conflicting rankings, you should use the IRRs to select the project

4. The NPV method assumes that cash flows will be reinvested at the cost of capital while IRR rankings implicitly assume that cash flows are reinvested at the IRR.

1. Borrow short term to finance additional fixed assets

2. Issue long term debt to buy inventory

3. Sell common stock to reduce current liabilities

4. Sell fixed assets to reduce accounts payable

1. 1.60

2. 2.0

3. 1.50

4. 4.00

1. 31%

2. 40%

3. 45%

4. 55%