After Appraisal of an Investment Opportunity, the Net Present Value

question 44

Multiple Choice

After appraisal of an investment opportunity, the net present value was calculated as $1,000. This indicated that the project's return is:

• A) greater than the discount rate used in the analysis.
• B) greater than the company's rate of return.
• C) equal to the market rate of return.
• D) the opportunity rate.

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Definitions:

Individual Investors

Private individuals who invest their own money in various financial instruments, such as stocks, bonds, or real estate, aiming to achieve personal financial goals.

Par Value

A nominal or face value assigned to a share of stock by the corporation at the time of issuance.

Bond Indentures

A legal and binding contract between a bond issuer and the bondholders, specifying the terms of the bond such as interest payments and the maturity date.

Debt Financing

A method of funding in which a company raises capital by borrowing funds, typically through loans or issuing bonds.