Examine the following statements. (i) Payback period method measure the true profitability of a project. (ii) Capital Rationing and capital budgeting mean the same thing. (iii) Internal Rate of Return and Time Adjusted rate of Return are the same thing. (iv) Rate of Return takes into account the time value of money. A. (i), (ii) and (iii) are correct. B. (ii) and (iii) are correct. C. Only (iii) is correct. D. All (i), (ii), (iii) and (iv) are false

Select all of the following that managers can use to evaluate capital invesments. (Select all that apply.) High-Low Method Net present value method LIFO Method Internal rate of return method FIFO Method Annual rate of return Cash payback technique Depreciation method

iw) What does it mean for projects to be mutually exclusive? How should managers rank mutually exclusive projects? B. What are the strength and weaknesses of each of the following capital budgeting technique below? i. Payback i. ARR i. Profitability Index iv. IRR

• Give a conclusion about capital budgeting and its techniques.

Capital Budgeting is acquiring inputs with long term returns. Which of the following author gave the above definition? a. Charles Richard b. Lyrich c. Charles T.Hrongreen d. Richard Green Law

The use of natural resources in an economic activity involves setting up a project forharvesting (i.e. extracting) these resources. For the project to be viable, both economic andfinancial indicators - such as net present value (NPV) and internal rate of return (IRR)considering time value of money - are employed. a) Briefly explain the concept of "time value of money".  b) Moreover, explain how you will use NPV and IRR to determine the viability of a project.

What capital budgeting rule is a simple but imperfect attempt to solve the capital rationing problem?  a The profitability index  b The accounting rate of return  c The payback rule  d The internal rate of return  e The net present value rule

When we use the AFN equation to forecast the additional funds needed (AFN), we are implicitly assuming that all financial ratios are constant. A. True B. False

The weighted average cost of capital is used to determine whether or not a project should be done.   true false

Differentiate between the Net Present Value method and Internal Rate of Return method of capital budgeting. Please give an explanation with an example for each method.