In Regard to the NPV Method,which of the Statements Below

question 20

Multiple Choice

In regard to the NPV method,which of the statements below is TRUE?

• A)In the NPV model,if two projects are being compared,the one with the highest IRR is selected.
• B)In the NPV model,the present cash flows are discounted at the rate r,the cost of capital.
• C)In the NPV model,most future cash flows are stated in present value or current dollars and the inflow is "netted" against the outflow to see if the net amount is positive or negative.
• D)In the NPV model,the net present value of an investment is the present value of all benefits (cash inflow)minus the present value of all costs (cash outflow)of the project.

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Definitions:

Transactions

The exchange of goods, services, or funds between two or more parties, forming the basis of accounting records.

Debit Credit

The two aspects of every financial transaction, where debit increases assets or expenses and credit increases liabilities, equity, or income.

Par Value

The nominal value of a bond, share of stock, or coupon as stated by the issuer, often used as a legal face value.