If a Project Has a Negative Net Present Value, Its

question 24

Multiple Choice

If a project has a negative net present value, its profitability index will be

• A) one.
• B) greater than one.
• C) less than one.
• D) undeterminable.

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Definitions:

OSC Registration

The process by which individuals or firms must register with the Ontario Securities Commission to legally trade or underwrite securities in Ontario, Canada.

Restrictive Covenants

Provisions in a loan or bond agreement that limit certain actions of the borrower to protect the interests of the lender.

Seasoned Equity Offering

The process by which a company that is already publicly traded offers additional shares to the market.

Cash Offer

A proposal to buy assets or securities for cash, rather than through the exchange of shares or other forms of compensation.