Other Things Held Constant, Which of the Following Would Increase

question 18

Multiple Choice

Other things held constant, which of the following would increase the NPV of a project being considered?

• A) A shift from MACRS to straight-line depreciation.
• B) Making the initial investment in the first year rather than spreading it over the first three years.
• C) A decrease in the discount rate associated with the project.
• D) An increase in required net working capital.
• E) The project would decrease sales of another product line.

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Definitions:

Histogram

A graphical representation of the distribution of numerical data, using bars to show the frequency of data in successive numerical intervals of equal size.

Skewed

Describes a distribution that is not symmetrical, with data points that are more frequent on one side than the other.

Acres

A unit of area used primarily in the United States, equal to 4,840 square yards or about 4,047 square meters.

Stem-and-Leaf Display

A graphical method of displaying quantitative data to observe its distribution, resembling a histogram turned on its side for clearer numeric value reading.