A Project's NPV Profile Will Cross the Horizontal Axis At

question 161

Multiple Choice

A project's NPV profile will cross the horizontal axis at:

• A)the cost of debt.
• B)the cost of capital.
• C)the internal rate of return.
• D)zero.

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Definitions:

Net Margin

A profitability metric calculated as net income divided by revenue, expressed as a percentage, indicating how much of each dollar in revenues is translated into profits.

Sales

The activity or business of selling goods or services to customers.

Net Income

The amount of money a company has left after all expenses, taxes, and costs have been subtracted from total revenue.

Owner's Equity

The residual interest in the assets of an entity after deducting liabilities, representing the owners' share.