The First Term in an NPV Calculation Is Usually

question 119

Multiple Choice

The first term in an NPV calculation is usually:

• A) positive, because firms consider only positive returns.
• B) positive, because interest charges do not accrue until the second period.
• C) zero, because interest charges do not accrue until the second period.
• D) negative, because funds for the project have to be borrowed up front before it is begun.
• E) negative, because the cost of the project is immediate, but revenue streams from the project come later.

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