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NEW QUESTION: 1
Is it possible that a project has a payback period of one year, a negative NPV and a positive IRR?
A. No, because a project with a positive IRR has a positive NPV.
B. No, because a project with a negative NPV has a negative payback period.
C. Yes.
Answer: C
Explanation:
If the cumulative cash in one year equals the outlay and additional cash flows are not very large, this scenario is possible. e.g. initial outlay = 100, first year cash flow = 100 and second year cash flow = 5. The required rate of return is 10%. This project would have a payback period of 1 year, an NPV of -4.96 and an IRR of 4.77%.
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The chief audit executive's responsibility regarding control processes includes:
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B. Assisting senior management and the audit committee in the development of an annual assessment about internal control.
C. Ensuring that the internal audit activity assesses all control processes annually.
D. Maintaining the organization's governance processes.
Answer: B
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B. 1
C. 2
D. 3
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