Including the Option to Expand in Your Project Analysis Will

question 28

Multiple Choice

Including the option to expand in your project analysis will tend to:

• A) extend the duration of a project but not affect the project's net present value.
• B) increase the cash flows of a project but decrease the project's net present value.
• C) increase the net present value of a project.
• D) decrease the net present value of a project.
• E) have no effect on either a project's cash flows or its net present valuE.

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Definitions:

Rate Of Substitution

The rate at which a consumer can replace one good with another while maintaining the same level of utility.

Tee Shirts

A type of clothing characterized by short sleeves and a round neckline without a collar, commonly made of cotton or polyester.

Candy

A sweet food made primarily of sugar or syrup combined with flavoring, colorants, and sometimes chocolate or nuts.

Marginal Rate

Often refers to the additional rate of tax that applies to each extra dollar of income or the additional rate of return.