Which of the Following Would Increase the Net Present Value

question 93

Multiple Choice

Which of the following would increase the net present value of a project?

• A) increase in the net investment
• B) use of straight-line depreciation rather than MACRS
• C) decrease in the expected accounts payable
• D) decrease in the discount rate

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Definitions:

Lead Time

The period of time from order placement until the goods are received.

Inventory Needs

The required quantity and type of goods a business needs to have on hand to meet customer demand and maintain smooth operations.

Bulk Ordering

Involves purchasing large quantities of goods or materials, typically to gain economies of scale and reduce per-unit cost.

Backorders

Orders for goods or services that cannot be filled at the current time due to lack of available stock, and are therefore waiting to be fulfilled.