Which of the Following Statements Is Correct for a Project

question 64

Multiple Choice

Which of the following statements is correct for a project with a positive NPV?

• A)IRR exceeds the cost of capital.
• B)Accepting the project has an indeterminate effect on shareholders.
• C)The discount rate exceeds the cost of capital.
• D)The profitability index equals one.

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Definitions:

Capital Contribution

The cash, property, or other assets that investors or owners provide to a business in exchange for an ownership interest or equity.

RULPA

The Revised Uniform Limited Partnership Act, designed to update and standardize the law governing limited partnerships across the states.

Limited Partner

An investor in a limited partnership, who contributes capital but does not take part in management and is only liable to the extent of their investment.

State Statute

A state statute is a law enacted by the legislative branch of a state government, applicable within the jurisdiction of that state.