Which One of the Following Statements Is Correct About a Project

question 272

Multiple Choice

Which one of the following statements is correct about a project with an estimated internal rate of return of negative 100 percent?

• A) The net present value of the cash inflows is exactly equal to the initial investment in the project.
• B) The estimated sales volume is equal to the cash break-even level of sales.
• C) The estimated sales volume is equal to the financial break-even level of sales.
• D) The payback period is exactly equal to the life of the project.
• E) The net present value of the project is equal to zero.

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Definitions:

Ex-dividend Date

The specific date on which a stock trades without its dividend, meaning that if you purchase the stock on or after this date, you will not receive the next dividend payment.

Date Of Record

Date on which holders of record are designated to receive a dividend.

Excess Cash

The amount of cash holdings that exceeds what a business requires for its immediate operational needs.

Share Repurchase

A corporate action in which a company buys back its own shares from the marketplace, which can reduce the number of outstanding shares and often increase the value of remaining shares.