Should a Project Be Accepted If It Offers an Annual

question 59

Multiple Choice

Should a project be accepted if it offers an annual after-tax cash flow of $1,250,000 indefinitely, costs $10 million, is riskier than the firm's average projects, and the firm's WACC is 12.5%?

• A) Yes, since the project's NPV is positive.
• B) Yes, since a zero NPV indicates marginal acceptability.
• C) No, since the project's NPV is zero.
• D)No, since the project's NPV is negative.

Understand the concepts of elastic and inelastic demand for resources, and how the presence of substitutes affects this elasticity.

Learn the effects of wage changes on the quantity of labor demanded and the elasticity of labor demand.

Understand the factors leading to shifts in the labor demand curve.

Grasp the concept of elasticity of resource demand and its calculation.

---

Definitions:

Credit Cards

Credit cards are financial instruments issued by banks allowing cardholders to borrow funds at point of sale, subject to the agreement to pay back the borrowed amount plus any applicable interest.

Alternative Hypothesis

A statement that proposes a relationship between variables, opposite to the null hypothesis, indicating a significant effect or difference.

Brides.com

A website dedicated to providing resources, inspiration, and guidance for wedding planning.

Average Cost

The total cost of production divided by the number of units produced, providing a per-unit cost figure.