When Computing a Bid Price, the Net Present Value Should

question 189

Multiple Choice

When computing a bid price, the net present value should be set equal to zero because:

• A) The goal is to just break even from an accounting perspective.
• B) The required return is used as the discount rate.
• C) The internal rate of return must exceed the required rate of return.
• D) The internal rate of return will be unreliable.
• E) The company does not require a profit but does want to cover their production costs.

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