If the NPV of Project a Is + $120, and That

question 25

Multiple Choice

If the NPV of project A is + $120, and that of project B is -$40 and that of project C is +
$40, what is the NPV of the combined project?

• A) +$100
• B) -$40
• C) +$70
• D) +$120

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Definitions:

Indirect Expenses

Expenses that are not directly tied to a specific product or service but are necessary for the overall operation of a business.

Direct Expense

A cost that can be directly attributed to the production or sale of specific goods or services in a business.

Indirect Expense

Costs that are not directly tied to a specific product or service but are necessary for the overall operation of a business, such as utilities or rent.

Rent

The cost incurred for using properties or equipment owned by another party for a specified period.