An NPV of Zero Implies That an Investment's ____________

question 192

Multiple Choice

An NPV of zero implies that an investment's ____________.

• A) Cost exceeds the present value of its cash inflows.
• B) Cost is equal to the present value of its cash inflows.
• C) IRR is greater than the firm's required rate of return.
• D) Present value of cash inflows are positive.
• E) Present value of cash inflows exceed the investment's cost.

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Definitions:

Cheques

Written orders directing a bank to pay a specified sum of money from the writer's account to the person or entity named on the cheque.

Bills Of Exchange

Documents that signify a written order directing one party to pay a determined sum to another by a specific date.

Promissory Notes

Written promises to pay a specified sum of money to a designated person at a fixed or determinable future time.

Defect Of Title

A legal issue with the deed of a property that makes its ownership status unclear, such as a lien or encumbrance.