Which Statement Concerning the Net Present Value (NPV) of an Investment

question 32

Multiple Choice

Which statement concerning the net present value (NPV) of an investment or a financing project is correct?

• A) a financing project should be accepted if, and only if, the NPV is exactly equal to zero.
• B) an investment project should be accepted only if the NPV is equal to the initial cash flow.
• C) any type of project should be accepted if the NPV is positive and rejected if it is negative.
• D) any type of project with greater total cash inflows than total cash outflows, should always be accepted.
• E) an investment project that has positive cash flows for every time period after the initial investment should be accepted.

---

Definitions:

Network Design

The planning and structuring of a network, including the selection of hardware and software to meet the requirements and objectives of an organization.

Disadvantages

These are the unfavorable, negative, or detrimental aspects or conditions that reduce the effectiveness or success.

Dependence

A situation in which the condition or fortunes of a person or entity are affected by another.

Centralization

The concentration of control and decision-making authority in a centralized location or group within an organization.