If a Project's Expected Rate of Return Exceeds Its Opportunity

question 27

Multiple Choice

If a Project's expected rate of return exceeds its opportunity cost of capital, one would expect:

• A)The profitability index to exceed 1.0
• B)The opportunity cost of capital to be too low
• C)The IRR to exceed the opportunity cost of capital
• D)The NPV to be zero

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Definitions:

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