A Project Has a Net Present Value of $1,200 and a Project

question 5

Multiple Choice

A project has a net present value of $1,200 and a project life of 4 years.Which one of these statements must be true?

• A)The project's total cash inflows minus its cash outflows equals $1,200.
• B)The project is expected to return $1,200 in Time 0 dollars over and above the discount rate.
• C)The project would also have a positive net present value if Year 4 was omitted.
• D)The project's cash inflows exceed its outflows by $1,200 over the 4 years.
• E)The project is expected to return $1,200 in Year 4 dollars over and above the initial investment.

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Definitions:

Responsive Pleading

A legal document filed in response to an initial complaint, addressing and contesting the points raised.

Motion to Dismiss

A legal request submitted to a court, asking to dismiss a particular case for specific reasons before going to trial.

Discovery

Formal investigation prior to trial. Opposing parties use various methods, such as interrogatories and depositions, to obtain information from each other and from witnesses to prepare for trial.

Counterclaim

A legal claim brought against the plaintiff by the defendant within the same lawsuit.