Complete the Following Decision Rule: a Project Should Be Accepted

question 325

Multiple Choice

Complete the following decision rule: A project should be accepted if its ______ exceeds the firm's required rate of return.

• A) IRR
• B) NPV
• C) payback
• D) discounted payback
• E) AAR

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Definitions:

Working Capital

The difference between a company's current assets and current liabilities, representing the short-term liquidity.

Long-Term Debt

Financial obligations of a company that are due more than one year in the future.

Current Assets

Assets owned by a company that are expected to be converted into cash, sold, or consumed within one year or within the operating cycle of the business.