Which One of the Following Statements Is Correct

question 85

Multiple Choice

Which one of the following statements is correct?

• A)The net present value is a measure of profits expressed in today's dollars.
• B)The net present value is positive when the required return exceeds the internal rate of return.
• C)If the initial cost of a project is increased, the net present value of that project will also increase.
• D)If the internal rate of return equals the required return, the net present value will equal zero.
• E)Net present value is equal to an investment's cash inflows discounted to today's dollars.

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Definitions:

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or the normal operating cycle, whichever is longer.

Short-Term Solvency

A financial metric indicating a company's ability to meet its short-term obligations, highlighting liquidity.

Current Ratio

A financial ratio indicating a firm's capacity to meet its short-term liabilities using its existing assets.

Current Assets

Current assets are assets that a company expects to convert into cash, sell, or consume within one year or its operating cycle, whichever is longer.