If a Project Is Acceptable Using the NPV Criterion,then It

question 103

True/False

If a project is acceptable using the NPV criterion,then it will also be acceptable using the discounted payback period since both methods use discounted cash flows to make the accept/reject decision.

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Definitions:

Call Provision

A feature of a bond or other fixed-income security that allows the issuer to repay the principal before the maturity date, typically at a premium.

Bond Rating

A measure of the likelihood of default on payment of interest or principal. Ratings are prepared by rating agencies. The best known agencies are Moody’s and Standard and Poor’s.

Restrictive Covenants

Provisions in a contract or loan agreement that limit the borrower's actions, intended to protect the lender by maintaining the borrower's creditworthiness.