1. What's the present value of $14,500 discounted back 5 years if the appropriate interest rate is 4.5%, compounded semiannually?
a. $9,356.45 b. $9,349.95 c. $9,362.95 d. $9,343.45 e. $9,336.95
2. Which of the following statements is false?
A When evaluating a capital budgeting project, financial managers should make the decision that maximizes NPV.
B The most difficult part of capital budgeting is deciding how to estimate the cash flows and the cost of capital.
C The break-even level of an input is the level for which the investment has an IRR of zero.
D Sensitivity analysis reveals which aspects of the project are most critical when we are actually managing the project.