When the Present Value of the Cash Inflows Exceeds the Initial

question 58

Multiple Choice

When the present value of the cash inflows exceeds the initial cost of a project, then the project should be:

• A)accepted because the internal rate of return is positive.
• B)accepted because the profitability index is greater than 1.
• C)accepted because the profitability index is negative.
• D)rejected because the internal rate of return is negative.
• E)rejected because the net present value is negative.

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Definitions:

Extraversion

A characteristic of an individual that includes being outgoing, conversational, bold, and demonstrating a significant amount of emotional openness.

Realization

The act of becoming fully aware of something as a fact or understanding a concept completely.

Open to Experience

A personality trait describing individuals who are imaginative, curious, and open-minded toward new experiences.

Neurotic

A characteristic of personality marked by fluctuations in emotion, anxiousness, shifts in mood, concerns, and apprehension.