If the Hurdle Rate Is Greater Than the Internal Rate

question 103

Multiple Choice

If the hurdle rate is greater than the internal rate of return,the net present value will be:

• A)positive.
• B)negative.
• C)zero.
• D)equal to the hurdle rate.

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Definitions:

Fixed-Period Inventory System

An inventory control system where stock levels are checked at fixed intervals and orders are placed as needed to replenish supplies.

Fixed Quantity Inventory System

Inventory management strategy where a predefined quantity of product is ordered when stock falls to a certain level.

Stockout

A situation where the demand for a product exceeds its supply in inventory, resulting in an inability to meet customer demand.

Annual Holding Cost

the total expense incurred from storing and maintaining inventory over a year, including warehousing, depreciation, and insurance costs.