1. Two projects a and b with the same risk level but different cash flow. which of the two projects will be accepted
a-project a with higher IRR than B
b-project b with shorter payback period than a
c-project b with higher NPV than A
d-project a with longer payback period but more cash flow than b
2. Physical and human capital investments are
different in that the opportunity for economic profit is present for physical capital but not for human capital investments.
different in that human capital decisions do not involve future income considerations, while physical capital investments do.
similar in that nonmonetary considerations play an equally important role in both.
similar in that both involve forgoing current income (and consumption) in an effort to achieve higher future income (and consumption).