A Firm Is Evaluating a Project That Has a Net

question 57

Multiple Choice

A firm is evaluating a project that has a net present value of £0 when a discount rate of 8 per cent is used. A discount rate of 6 per cent will result in

• A)a negative net present value.
• B)a positive net present value.
• C)a net present value of £0.
• D)The question cannot be answered based upon the information provided.

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Definitions:

Conservation

In psychology, the concept that a child recognizes that quantity does not change with physical rearrangement; in environmental science, the protection of natural resources.

Public Commitments

Decisions or promises made in a public setting, which are more likely to be upheld due to the added pressure of social accountability.

Prompts

Cues that convey a message and remind people to do something.

Hypocrisy Induction

A technique for effecting behavior change by confronting people with the inconsistency between their attitudes and their behavior.