Suppose a Project Requires an Initial Investment of $1,000 and It

question 108

Multiple Choice

Suppose a project requires an initial investment of $1,000 and it will yield $1,050 one year later.The NPV of the project is:

• A)equal to $50.
• B)less than 0 if the discount rate is less than 5 percent.
• C)zero if the discount rate is equal to 5 percent.
• D)positive if the discount rate is greater than 5 percent.

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Definitions:

Ending Inventory

The worth of products on hand for sale at the conclusion of an accounting cycle, determined by adding the starting inventory to acquisitions and then subtracting the cost of goods sold.

Merchandise Inventory

Goods or products that a company holds for the purpose of sale to customers in the ordinary course of business.

Capital

Financial assets or resources owned by an individual or organization, particularly those used to generate income or investment.

Adjusting Journal Entries

Journal entries that are needed in order to update specific ledger accounts to reflect correct balances at the end of an accounting period.