When a Manager Does Not Accept a Positive-NPV Project,shareholders Face

question 36

Multiple Choice

When a manager does not accept a positive-NPV project,shareholders face an opportunity cost in the amount of the:

• A) project's initial cost.
• B) project's NPV.
• C) project's discounted cash inflows.
• D) soft capital rationing budget.

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Definitions:

Collection Delay

The period between when a company invoices its customers and when it actually receives payment, affecting the company's cash flow.

Amounts

Quantities or sums of money.

Cash Balance

The amount of cash or cash equivalents that a company or individual has readily available.

Market Rate Of Return

The average rate of return on investment that is expected by investors in the market, typically based on historical data.