Without Using Formulas, Provide a Definition of Net Present Value

question 307

Multiple Choice

Without using formulas, provide a definition of net present value profile.

• A) A graphical representation of the relationship between varying rates of return and the corresponding NPV value.
• B) A situation whereby a choice has to be made between two or more projects, and choosing multiple projects is not an option
• C) The rate of return provided by a project. The value is compared with a company's rate of return to determine viability of a project.
• D) A project analysis tool that measures the acceptability of a project through the difference between a project's initial investment and whether the present value of its cash flow will repay the investment.
• E) A project analysis tool that measures the acceptability of a project by determining the amount of profit that can be expected based on an investment made.