When a Project Has a Positive Net Present Value,it Has

question 38

Multiple Choice

When a project has a positive net present value,it has a profitability index:

• A)greater than zero.
• B)less than zero.
• C)greater than one.
• D)less than one.

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Definitions:

Semiannual Payments

Payments made twice a year, often in the context of loan repayments or interest payments.

Compounded Semiannually

A method of calculating interest where the interest earned over half a year is added to the principal, and the new total becomes the basis for the next round of interest calculation.

Cost

The monetary value spent by a company to produce or acquire goods or services, including manufacturing and operating expenses.

Compounded Annually

The process of adding interest to the principal sum of a deposit or loan, with the interest that has been added also earning interest from that point on.