What Is the Key Reason Why a Positive NPV Project

question 1

Multiple Choice

What is the key reason why a positive NPV project should be accepted?

• A)The project is expected to increase shareholder value.
• B)The present value of the expected cash flows equals the project's cost.
• C)The project will produce positive cash flows in the future.
• D)The project's payback will be positive during its life.
• E)The project's PI will be less than 1,which indicates acceptance.

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Definitions:

Sample Size

The number of observations or data points collected in a statistical sample.

Degrees of Freedom

The count of independent pieces of information available to estimate another statistic, crucial in defining the distribution of various test statistics.

Contingency Table

A table used in statistics to display the frequency distribution of variables to show the relationship between them.

Level of Significance

The probability of rejecting the null hypothesis in a statistical test when it is in fact true; commonly set thresholds include 0.05 or 0.01.