This quiz is a part of the CFA Level 1 reading 'Capital Budgeting'. 

Capital Budgeting

The number of years that it takes to earn a profit on a project.

The number of periods required to pay for the original investment.

The number of cash-flow periods of a project

The slope of NPV profile of both projects is equal.

The slope of NPV profile of project A is flatter than slope of NPV profile of project B.

The slope of NPV profile of project A is steep than slope of NPV profile of project B.

Ignores cash ﬂows beyond the payback period.

Provides a rough approximation of a projects liquidity and risk.

Acceptance of one project means rejection of the other.

Project B must have a higher NPV than Project A.

The NPV of both projects must be negative.