In Discounted Cash Flow Analysis, Which of the Following Is

question 11

Multiple Choice

In discounted cash flow analysis, which of the following is a bad decision rule?

• A) If NPV < 0 then reject
• B) If IRR < opportunity cost of capital then reject
• C) If IRR c opportunity cost of capital then reject
• D) If NPV c 0 then accept

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Definitions:

Physical-Fitness Program

A structured regimen or plan designed to improve an individual's physical health and performance.

Economies of Scale

Reductions in the average cost of a product due to increased production levels.

Diseconomies of Scale

An increase in production costs as the scale of production goes up, leading to reduced efficiency.

Fixed Inputs

Resources or factors of production, such as land or capital, that remain constant regardless of the level of output or production.