1. Under what conditions should you use internal rate of return (IRR) to rank two mutually exclusive projects?
a. If and only if both projects have exactly one IRR
b. If and only if cash flows for both projects are conventional
c. If and only if cash flows for both projects are reverse conventional
d. If and only if cash flows for both projects are conventional and the projects are of the same scale
e. If and only if cash flows for both projects are conventional and the projects are of the same scale and the projects are similar in risk to the other projects the firm typically takes
f. None of these
2. Ms. TN owns a one-half interest in an apartment complex, which is her only passive activity. The complex operated at a $53,000 loss this year. In addition to her share of this loss, Ms. TN had the following income items: Salary $ 59,000 Interest and dividends 4,400
A. Compute her AGI.
B. Compute her AGI if her salary was $168,250 rather than $59,000?