Which of the Following Statements Is True of a Project

question 57

Multiple Choice

Which of the following statements is true of a project with a positive net present value (NPV) ?

• A) The project's internal rate of return is less than the expected rate of return.
• B) The project has multiple internal rates of return.
• C) The project's terminal value is less than the future value of the initial investment in the project.
• D) The project's initial investment is recovered on a present value basis prior to the end of the project's useful life.
• E) The present value of project's cash inflows and multiple cash outflows discounted at internal rate of return are equal.

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Definitions:

Standard Deviation

An indicator of the spread or distribution of a group of numbers, showing the degree to which these numbers vary from the average.

Uniform Distribution

A type of probability distribution in which all outcomes are equally likely over a given interval.

Probability

The measure of the likelihood that a specific event will occur, expressed as a number between 0 and 1.

Subway Waiting

The time period a passenger waits for a subway train to arrive, typically considered as a random variable in transit studies.