If a Project Has a Net Present Value Equal to Zero,then

question 40

Multiple Choice

If a project has a net present value equal to zero,then: I. the present value of the cash inflows exceeds the initial cost of the project.
II) the project produces a rate of return that just equals the rate required to accept the project.
III) the project is expected to produce only the minimally required cash inflows.
IV) any delay in receiving the projected cash inflows will cause the project to have a negative net present value.

• A) II and III only
• B) II and IV only
• C) I, II, and IV only
• D) II, III, and IV only
• E) I, II, and III only

---

Definitions:

Machine Hours

A measure of production time, representing the total hours that machinery is operated in the manufacturing of a product.

Number Of Employees

The overall number of people working for a firm, encompassing both those in full-time and part-time positions.

Step-down Method

A cost allocation method used in accounting to distribute overhead costs to various departments or products.

Machine Hours

The total number of hours that machinery is operational during a certain period.