If the NPV (Net Present Value)of a Project with One

question 157

Multiple Choice

If the NPV (Net Present Value) of a project with one sign reversal is positive,then the project's IRR (Internal Rate of Return) ________ the required rate of return.

• A) must be less than
• B) must be greater than
• C) could be greater or less than
• D) The project's IRR cannot be determined without actual cash flows.

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Definitions:

Initial Public Offering

The first sale of stock by a private company to the public, typically used to raise capital for expansion.

Common Shareholder

A common shareholder is an individual or entity that holds common stock in a corporation, granting them voting rights and a share in the company's profits through dividends.

Declare Dividends

The action by a company's board of directors to distribute a portion of the company’s earnings to its shareholders.