If a Project Is Assigned a Required Rate of Return

question 348

Multiple Choice

If a project is assigned a required rate of return equal to zero, then:

• A) The timing of the project's cash flows has no bearing on the value of the project.
• B) The project will always be accepted.
• C) The project will always be rejected.
• D) Whether the project is accepted or rejected will depend on the timing of the cash flows.
• E) The project can never add value for the shareholders.

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Definitions:

Berkeley

An Irish philosopher who proposed idealism, the theory that reality exists only in the minds of individuals and that what we perceive as physical objects are merely collections of ideas.

Kant

A reference to Immanuel Kant, an 18th-century German philosopher known for his work in epistemology, ethics, and aesthetics.

William James

An American philosopher and psychologist, often considered the father of American psychology, known for his works on pragmatism.

Useful Explanation

Explanation that provides a significant amount of understanding or clarity on a subject or phenomenon.