When Evaluated Using a Nominal Rate of 8%, the Net

question 123

Multiple Choice

When evaluated using a nominal rate of 8%, the net present value of a project is zero. Identify which one of the following statements is true.

• A) At 6% the project is desirable and at 8% it is undesirable.
• B) The project is undesirable at 6% or 8%.
• C) At 8% the project is desirable and at 6% it is undesirable.
• D) The project is desirable at 6% or 8%.

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Definitions:

Avoidance

A behavior aimed at preventing the occurrence of an unpleasant stimulus or situation.

Severity

The level of intensity or seriousness of a situation, condition, or disease.

Delay

The act of postponing or causing something to occur at a later time than originally planned or expected.