The NPV of an Investment Made Today Is $10,000

question 43

Multiple Choice

The NPV of an investment made today is $10,000.If postponed for one year, the NPV at that time will increase by $1,000.Which of the following is correct if the opportunity cost of the investment is 12 percent?

• A)postpone; the NPV increases by a positive amount.
• B)postpone; the NPV will be larger.
• C)invest now; NPV does not grow at a sufficient rate.
• D)invest now; always accept positive NPV projects.

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Definitions:

Tests

Procedures for evaluating the functionality, reliability, or performance of a system or component.

Method

A function associated with an object or class in object-oriented programming, used to perform specific actions or calculations.

Local Variables

Variables that are declared inside a function or block of code and are only accessible within that function or block.

Method Main

The entry point for execution in many programming languages, particularly Java, where the main method is where the program starts running.