Fora Project with Conventional Cash flOws, If NPV Is Greater

question 283

Multiple Choice

Fora project with conventional cash flows, if NPV is greater than zero, then:

• A) The IRR is equal to the firm's required rate of return.
• B) The profitability index is greater than 1.
• C) The payback period is faster than the firm's required cutoff point.
• D) The AAR exceeds the IRR.
• E) The project does not pay back on a discounted payback basis.

Understand the role of innovation in business success and its relation to business size.

Recognize the employment patterns and contributions of small businesses in the job market.

Understand the challenges faced by small businesses, including financing, taxation, and government regulations.

Appreciate the diversity of ownership and the varied challenges they face in today’s market.

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Definitions:

Investment Securities

Financial instruments purchased with the intent of holding them for investment. These can include stocks, bonds, and other securities.

Patents

Legal documents granting an inventor exclusive rights to produce, use, and sell an invention for a certain period of time.

Raw Materials Inventory

The total cost of all components and materials that are used in the production of a final product but have not yet been used in the manufacturing process.

Historical Cost

An accounting method where assets are listed and valued on the balance sheet at their original purchase price.