A Project Has a Net Present Value of $1,200 and a Project

question 34

Multiple Choice

A project has a net present value of $1,200 and a project life of 4 years.Which one of these statements must be true?

• A)The project's total cash inflows minus its cash outflows equals $1,200.
• B)The project is expected to return $1,200 in Time 0 dollars over and above the discount rate.
• C)The project would also have a positive net present value if Year 4 was omitted.
• D)The project's cash inflows exceed its outflows by $1,200 over the 4 years.
• E)The project is expected to return $1,200 in Year 4 dollars over and above the initial investment.

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Definitions:

Internal and External Customers

Internal customers are employees or departments within an organization that depend on each other's work, while external customers are individuals or entities that purchase the company’s products or services.

Contingency Approach

A management theory that suggests the most appropriate organizational structure or management style is contingent upon the internal and external situation.

Evolution of Management

Refers to the historical development and transformation of management theories and practices over time.

Open System Analysis

An approach to analyze organizations by considering the continuous interaction with their environment, enabling adaptation and sustainability.