1. Many firms today continue to use the payback method but employ the NPV or IRR

1. Many firms today continue to use the payback method but employ the NPV or IRR methods as secondary decision methods of control for risk False Which of the following statements about the MIRR is falseA. The MIRR has the same reinvestment assumption as the NPV.B. The MIRR has the same reinvestment assumption as the IRR.C. If a project s MIRR exceeds the firm s discount rate the project is acceptable.D. A project s MIRR could be lower than a project s IRR.2. We compute the profitability index of a capital-budgeting proposal byA. dividing the present value of the annual after-tax cash flows by the cost of the project.B. multiplying the IRR by the cost of capital.C. dividing the present value of the annual after-tax cash flows by the cost of capital.D. multiplying the cash inflow by the IRR.3. Compute the payback period for a project with the following cash flows if the company s discount rate is 12%. Initial outlay = $450 Cash flows: Year 1 = $325 Year 2 = $ 65 Year 3 = $100A. 2.88 yearsB. 3.43 yearsC. 3.17 yearsD. 2.6 years4. The true owners of the corporation are the:A. board of directors of the firm.B. common stockholders.C. holders of debt issues of the firm.D. preferred stockholders.