A Firm Seeks to Accept Projects with a High Degree

Multiple Choice

A firm seeks to accept projects with a high degree of liquidity, avoid the higher forecasting error associated with cash flows occurring in the distant future, and avoid projects that require a large amount of research and development expenses. This firm may be justified in using the ____________ to evaluate its projects.

A) IRR rule.
B) NPV rule.
C) AAR rule.
D) Payback rule.
E) PI rule.