The Primary Idea Behind the Net Present Value Rule Is

question 111

Multiple Choice

The primary idea behind the net present value rule is that an investment:

• A) Is worthwhile if it creates value for the owners.
• B) Must have total cash flows that equal zero.
• C) Should be accepted if it enhances management's position.
• D) Should break-even from an accounting point of view.
• E) Should earn a rate of return that is less than the discount rate.

---

Definitions:

Scrap Value

The estimated residual value of an asset after it has reached the end of its useful life, often associated with the material worth of its components.

Charge

A fee or cost for a service rendered or a penalty for a wrongdoing.

Voice-Activated

Technology that allows devices or software to be controlled through spoken commands, facilitating hands-free operation.

Thought-Activated

Technology or systems controlled by human thought, without the need for physical interactions.