If a Company's Required Minimum Rate of Return Is 10

question 135

Multiple Choice

If a company's required minimum rate of return is 10%, and in using the net present value method, a project's net present value is zero, this indicates that the

• A) project's rate of return exceeds 10%.
• B) project's rate of return is less than the minimum rate required.
• C) project earns a rate of return of 10%.
• D) project earns a rate of return of 0%.

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Definitions:

Neoclassical Economics

An economic theory that focuses on how the perception of utility and costs influence the supply and demand equilibrium.

Complementary

Products or services that enhance or are used together with another, increasing the value or usability of either.

Self-interest

The pursuit of personal advantage and well-being, often driving economic decisions.

Neoclassical Models

Economic theories and models that focus on the determination of prices, outputs, and income distributions in markets through supply and demand, often under the assumption of rational behavior and efficient markets.