When You Set the Project NPV Equal to Zero in Calculating

question 210

Multiple Choice

When you set the project NPV equal to zero in calculating a bid price you are:

• A) Going to earn zero net income on the project.
• B) Appropriately including opportunity costs in your analysis.
• C) Certain to be the low bidder since, if any firm does bid lower, they will be bidding based on a negative NPV project.
• D) Assured of earning your firm's highest possible IRR.
• E) Finding the price at which you expect to create zero wealth for your shareholders.

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