1. Which of the following decision rules results in multiple answers for projects with nontraditional cash flows? Select one: a. Payback period b. Average accounting return c. Discounted payback d. Net present value e. Internal rate of return
2. Most firms generate cash inflows every day, not just once at the end of the year. In capital budgeting, should we recognize this fact by estimating daily project cash flows and then using them in the analysis? If we do not, will this bias our results? If it does, would the NPV be biased up or down? Explain.
3. The purchase and sale of securities through the New York Stock Exchange occurs in the: Select one: a. Primary market. b. Liquidation market. c. Dealer market. d. Secondary market. e. Auction market.