When a Manager Does Not Accept a Positive-NPV Project, Shareholders

question 118

Multiple Choice

When a manager does not accept a positive-NPV project, shareholders face an opportunity cost in the amount of the:

• A)Project's initial cost.
• B)Project's NPV.
• C)Project's discounted cash flows.
• D)Soft capital rationing budget.

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Definitions:

Uranium

A heavy metal with atomic number 92, used as fuel in nuclear reactors and in nuclear weapons.

International Firms

Companies that engage in business operations across national borders.

Mining Operations

The process of extracting minerals or other geological materials from the earth.

Hydraulic Fracturing

A method of extracting underground resources such as oil and natural gas by injecting liquid at high pressure into subterranean rocks, boreholes, etc., to force open existing fissures and extract oil or gas.