If the Net Present Value (NPV) of a Project Is

question 63

Multiple Choice

If the net present value (NPV) of a project is positive,:

• A)the project's discounted payback period is longer than the useful life of the project.
• B)the internal rate of return is lower than the firm's required rate of return.
• C)the project is not acceptable.
• D)the project's discounted payback period is less than its traditional payback period.
• E)accepting the project will increase the value of the firm.

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Definitions:

Articles of Partnership

A written agreement between all parties in a partnership that outlines the terms, responsibilities, and profit distribution among the partners.

Partnership

A legal arrangement where two or more persons agree to manage and operate a business and share its profits or losses.

Written Agreement

A formal contract that outlines the terms and conditions of a particular arrangement, documented in writing.

Chain-style Business

A business model where multiple outlets of the same company offer the same product or service, typically under the same brand.