The Principle That an Investment Should Be Accepted If the Difference

question 156

Multiple Choice

The principle that an investment should be accepted if the difference between the investment's market value and its cost is positive and rejected if the difference is negative is referred to as the:

• A) Average accounting return rule.
• B) Internal rate of return rule.
• C) Profitability index rule.
• D) Discounted payback rule.
• E) Net present value rule.

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Definitions:

Intense

Characterized by a high degree of emotion, energy, or activity; often used to describe situations or feelings that are powerful and extreme.

Particular Event

A specific occurrence or happening, distinct from other events.

Oligopoly

A market structure in which a few large firms dominate a market.

Marginal Cost

The additional expense incurred from the production of one more unit of a good or service.