A Project Is Considered Acceptable If

question 54

Multiple Choice

A project is considered acceptable if:

• A) The net present value of the project is positive
• B) The internal rate of return is greater than the hurdle rate
• C) The modified payback period is less than the estimated useful life
• D) All of these are true, however a company will still need to determine how to allocate capital resources and thus they may not choose a project based on a single criteria as listed above LO

---

Definitions:

Unusual Item

A significant transaction or event that is infrequent in nature, distinct from the ordinary activities of the business.

Current Operations

Relates to the primary activities that a business performs to earn revenue within its normal business cycle.

Accounting Methods

Systems that companies use to record their financial transactions, such as cash basis and accrual basis accounting.

Comparable Data

Information or statistics that are sufficiently similar in nature to serve as a basis for comparison in analytical or valuation efforts.