When Reviewing the Net Present Profile for a Project

question 60

Multiple Choice

When reviewing the net present profile for a project,

• A) the higher the discount rate, the higher the NPV.
• B) the higher the discount rate, the higher the IRR.
• C) the IRR will always be a point on the horizontal axis line where NPV = 0.
• D) the IRR will always be a point on the horizontal axis equal to the required return.

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Definitions:

Deposit

Money placed in a bank account or to secure a purchase until the transaction is completed.

Adjusted Cash Balance

The cash balance reported in a company's financial statements after adjustments have been made for checks written, deposits in transit, and other discrepancies.

Bank Statement

A document or electronic report issued by a bank summarizing transactions, including deposits and withdrawals, over a specific period.

Service Charge

A fee charged for a particular service provided by a company or institution.