Question 12 pts Project cash flows are considered convention

Question 12 pts

Project cash flows are considered conventional or normal if _____.

In capital budgeting, we should accept a project if _____.

Based on the payback period criterion, we should accept a project if the payback period is _____.

Based on the NPV criterion, we should accept a project if the NPV is _____.

Based on the IRR criterion, we should accept a project if the IRR is _____.

Which are valid reasons for using the IRR? Check all that apply:

Which statement is correct about the payback method?

An investment should be _____ if the net present value is _____ and _____ if it is _____.

Which are reasons for considering NPV the best decision criterion? Check all that apply

The IRR is the discount rate that _____.

When capital is limited, we should generally accept the project with a profitability index that is _____.

Solution

12)

There are tow types of cash flows, conventional cash flows and uneven cash flows. one or more beginning continuous cash flows are negative and rest are positive are conventional. All cash flows other than conventional cash flows are uneven cash flows.

Hence, correct option is “the first (one or more) cash flows are negative and the rest are positive”.