Answer the following statements true (T) or false (F)

1. The accept-reject approach involves the ranking of capital expenditure projects on the basis of some predetermined measure, such as the rate of return.
2. A conventional cash flow pattern is one in which an initial outflow is followed only by a series of inflows.
3. Large firms evaluate the merits of individual capital budgeting projects to ensure that the selected projects have the best chance of increasing the firm value
4. A nonconventional cash flow pattern is one in which an initial inflow is followed by a series of inflows and outflows.
5. In the case of annuity cash inflows, the payback period can be found by dividing the initial investment by the annual cash inflow.


1. FALSE
2. TRUE
3. TRUE
4. TRUE
5. TRUE

Business

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