1. Net working capital:
A. is the only expenditure where at least a partial recovery can be made at the end of a project.
B. is frequently affected by the additional sales generated by a new project.
C. can be ignored in project analysis because any expenditure is normally recouped by the end of the project.
D. requirements generally, but not always, create a cash inflow at the beginning of a project.
E. expenditures commonly occur at the end of a project.
2. Which one of the following statements concerning net present value (NPV) is correct?
A. An investment should be accepted only if the NPV is positive and rejected if it is negative.
B. An investment should be accepted only if the NPV is equal to the initial cash flow.
C. An investment should be accepted if, and only if, the NPV is exactly equal to zero.
D. An investment with greater cash inflows than outflows, regardless of when the cash flows occur, will always have a positive NPV and therefore should always be accepted.
E. Any project that has positive cash flows for every time period after the initial investment should be accepted.