When a Project's NPV Exceeds Zero

question 46

Multiple Choice

When a project's NPV exceeds zero,

• A) The project will also be acceptable using payback criteria.
• B) The IRR should be calculated to insure that the project's projected rate of return exceeds the required rate of return.
• C) The project should be accepted without any further consideration,assuming we are confident that the cash flows and the required rate of return have been properly estimated.
• D) Only answers a and c are correct.
• E) None of the above is correct.

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Definitions:

Intangible Product

A product that cannot be touched or physically measured, often involving services or digital goods.

Management Activity

The range of actions, decisions, and responsibilities undertaken by managers to operate and control organizations.