If the Net Present Value of a Project Which Costs

question 97

Multiple Choice

If the net present value of a project which costs $20,000 is $5,000 when the discount rate is 10 percent, then the:

• A)project's IRR equals 10 percent.
• B)project's internal rate of return is greater than 10 percent.
• C)net present value of the cash inflows is $4,500.
• D)project's cash inflows total $25,000.

Recognize the difficulty in establishing construct validity and its significance.

Understand the equation that represents the relationship between observed scores, true scores, and error.

Understand how error impacts reliability and the general equation for reliability.

Know the metaphorical explanation for reliability and validity using archery.

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Definitions:

Market Price

The current price at which a good or service can be bought or sold in a particular market.

Long Run

A period in economic analysis where all factors of production and costs are variable, allowing full adjustment to changes.

Weekly Operating Profits

Weekly operating profits describe the earnings a business generates from its normal operations over a one-week period, excluding any income from investments or other non-operational sources.

Short Run

An interval in economic studies where a minimum of one production element remains constant and is unalterable.