As Long as the NPV of a Project Declines Smoothly

question 70

Multiple Choice

As long as the NPV of a project declines smoothly with increases in the discount rate, the project is acceptable if its:

• A)Internal rate of return is positive
• B)Net present value does not equal zero
• C)Rate of return exceeds the cost of capital
• D)Cash inflows exceed the initial cost

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Definitions:

Recessive Gene

A gene that produces its characteristic phenotype only when its allele is identical, otherwise being masked by the effects of a dominant gene.

Temperament

An individual's innate disposition or behavioral style and characteristic emotional response.

Chess and Thomas

Researchers known for their work on temperament, particularly identifying three basic types of temperament in infants: easy, difficult, and slow-to-warm-up.

Wear-and-tear Theory

A theory of aging that suggests that the body, like any machine, gradually wears out due to use over time.