If a Project's Net Present Value (NPV) Is Positive

question 42

Multiple Choice

If a project's net present value (NPV) is positive,:

• A)Its internal rate of return is less than the firm's expected rate of return.
• B)It must have multiple internal rates of return.
• C)Its terminal value is less than the future value of the initial investment in the project.
• D)Its initial investment is recovered on a present value basis prior to the end of the project's useful life.
• E)The present value of the project's cash inflows and the present value of its cash outflows are equal when they are discounted at the firm's required rate of return.

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Definitions:

Operating Expenses

Costs associated with the day-to-day operations of a business or organization.

Wholesale Price

The cost of goods sold in large quantities, usually to retailers rather than directly to consumers.

Mark-up on Cost

The percentage added to the cost price of goods to cover overhead and profit.

Lettuce

A leafy green vegetable commonly used in salads and sandwiches.