1. Why do capital investment decisions require consideration of the time value of money?
2. What is the difference between the discount rate used for net present value computations and the internal rate of return? Explain your answer.
3. Fill in the blank: Fill in the blank with either the phrase greater than, less than, or equal to.
A. If a project's net present value is positive, the actual internal rate of return is ___________ than the discount rate.
B. If a project's net present value is zero, the actual internal rate of return is ___________ than the discount rate.
C. If a project's net present value is negative, the actual internal rate of return is ___________ than the discount rate.