If the NPV of a Project Is Greater Than Zero

question 49

Multiple Choice

If the NPV of a project is greater than zero, then its profitability index is

• A)less than 1.
• B)equal to 1.
• C)greater than 1.
• D)equal to 0.

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Definitions:

Operating Activities

Transactions and other events related to the day-to-day function of a business, typically involving revenue and expense activities directly affecting cash flow.

Investments In Securities

Financial assets such as stocks, bonds, or mutual funds purchased with the intent of generating income or appreciating in value.

Operating Activities

Activities that relate to a company's primary business operations, such as selling goods or services, which are reflected in its cash flow statement.

Interest Received

The amount of interest income earned on investments like bonds, savings accounts, or other interest-bearing assets during a specific period.