The Primary Reason That Company Projects with Positive Net Present

question 10

Multiple Choice

The primary reason that company projects with positive net present values are considered acceptable is that:

• A) they create value for the owners of the firm.
• B) the project's rate of return exceeds the rate of inflation.
• C) they return the initial cash outlay within three years or less.
• D) the required cash inflows exceed the actual cash inflows.
• E) the investment's cost exceeds the present value of the cash inflows.

Understand compound interest, continuous compounding, and their implications in financial mathematics.

Apply the properties of logarithms and exponents to simplify expressions.

Perform calculations involving effective yield to evaluate financial investments.

Model exponential growth and decay in various scenarios including population and investment growth.