Multiple Select QuestionSelect all that applyThe decision rule for NPV includes: (Check all that apply).Multiple select question.if an asset's future net cash flows yield a negative net present value, invest.when comparing projects with similar initial investments and risk, select the one with the lowest net present value.if an asset's future net cash flows yield a positive net present value, invest.when comparing projects with similar initial investments and risk, select the one with the highest net present value.

NPV Calculate the net present value (NPV) for the following 20-year projects.Comment on the acceptability of each. Assume that the firm has an opportunity costof 14%.a. Initial investment is $10,000; cash inflows are $2,000 per year.b. Initial investment is $25,000; cash inflows are $3,000 per year.c. Initial investment is $30,000; cash inflows are $5,000 per year.

Select Any One Of the Following Options: If NPV of the project is negative means project must be making losses.FalseTrue

Multiple Choice QuestionIt is appropriate to use the profitability index to evaluate investment decisions when:Multiple choice question.different discount rates are usedsome projects result in negative net present valuesthe amounts invested differ substantially

Multiple Choice QuestionA company needs to choose between two investment opportunities. Project 1 has a cost of $500,000 and expected NPV of cash flows of $450,000. Project 2 has a cost of $800,000 and expected NPV of cash flows of $750,000. Using profitability index as the evaluation method, the company should choose:Multiple choice question.either project. Both are acceptable because the difference between cost and NPV is $50,000 for bothProject 2 because it has a higher NPVProject 1 because it has a higher indexProject 2 because it has a higher index

Multiple Choice QuestionAn investment that costs $30,000 will produce annual cash flows of $10,000 for 4 years. Using a required return of 8%, the investment will generate (rounded to the nearest dollar) a:Present Value of 1RatePeriods7%8%9%40.76290.73500.7084Present Value of an Annuity of 1RatePeriods7%8%9%43.38723.31213.2397Multiple choice question.negative NPV of $3,121.positive NPV of $3,121.positive NPV of $33,121.negative NPV of $31,121.