An Investment Project Has a Positive Net Present Value

question 46

Multiple Choice

An investment project has a positive net present value.The internal rate of return is:

• A) less than the cost of capital.
• B) greater than the cost of capital.
• C) equal to the cost of capital.
• D) indeterminate; it depends on the length of the project.

---

Definitions:

Durable Equipment

Equipment that is designed for a long useful life, typically used in business, industrial, or medical settings.

Vertical Axis

In graph theory and visuals, the vertical axis is typically the y-axis, representing dependent variables or metrics that can be measured against the independent variables on the horizontal axis.

Price Elasticity of Demand

A measure of how much the quantity demanded of a good responds to a change in the price of that good, quantitatively defined as the percentage change in quantity demanded divided by the percentage change in price.

Equilibrium Values

The set of prices or quantities at which markets or economies reach a balance between supply and demand.