When Evaluating a Proposal by Use of the Net Present

question 16

True/False

When evaluating a proposal by use of the net present value method, if the present value is less than the amount to be invested, the rate of return on the proposal is more than the rate used in the analysis.

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Definitions:

Wage Rate

The amount of remuneration offered to labor for their service per unit time.

Bushel of Corn

A standard measure, equal to 56 pounds in the U.S., used for volumes of dry commodities such as corn.

Profits

The financial gains obtained when the revenues from a business activity exceed the expenses, costs, and taxes needed to sustain the activity.

Wage Rate

The standardized amount of compensation received by an employee for performed work per unit of time, typically expressed per hour or year.