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According to Graham and Harvey's 2001 survey (Figure 8.2 in the text) , the most popular decision rules for capital budgeting used by CFOs are ________.


A) NPV, IRR, MIRR
B) MIRR, IRR, Payback period
C) IRR, NPV, Payback period
D) Profitability index, NPV, IRR

E) B) and C)
F) A) and D)

Correct Answer

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A security company offers to provide CCTV coverage for a parking garage for ten years for an initial payment of $50,000 and additional payments of $30,000 per year. What is the equivalent annual annuity of this deal, given a cost of capital of 5%?


A) -$21,885
B) -$25,533
C) -$29,180
D) -$36,475

E) A) and B)
F) None of the above

Correct Answer

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