When the Present Value of the Cash Inflows Exceeds the Initial

question 107

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 payback period is less than the required time period. 
• 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 positive. 

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