When the NPV of an Investment Is Positive, Then the IRR

question 63

Multiple Choice

When the NPV of an investment is positive, then the IRR will be:

• A)equal to the opportunity cost of capital.
• B)greater than the opportunity cost of capital.
• C)less than the opportunity cost of capital.
• D)less than or equal to the opportunity cost of capital.

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Definitions:

Fundamental Attribution Error

The tendency for observers to overemphasize dispositional or personality-based explanations for behaviors observed in others while underemphasizing situational explanations.

Success

The achievement of a set goal, objective, or desired outcome.

Embezzlement

The act of dishonestly withholding assets for the purpose of conversion of such assets, by one or more individuals to whom the assets were entrusted.

Perceptually Exaggerating

The cognitive bias or tendency to overestimate the significance or size of an object, event, or outcome.