Which of the Following Should Be Assumed About a Project

question 32

Multiple Choice

Which of the following should be assumed about a project that requires a $100,000 investment at time-period zero, then returns $20,000 annually for five years?

• A)the NPV is negative
• B)the NPV is zero
• C)the profitability index is 1.0
• D)the IRR is negative

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Definitions:

Machine Division

A specialized segment within a manufacturing operation focused on the use of machines for production purposes.

Logistics Department

The division within a company responsible for the management of the movement of goods and services from suppliers to customers.

Operating Divisions

Distinct segments within a company, each responsible for certain operations or business units.

Fixed Costs

Outlays that do not fluctuate with production or sales figures, such as office rent, salary payments, and insurance policies.