If a Project's Expected Rate of Return Exceeds Its Opportunity

question 21

Multiple Choice

If a project's expected rate of return exceeds its opportunity cost of capital, one would expect:

• A) the profitability index to exceed 1.0.
• B) the opportunity cost of capital to be too low.
• C) the IRR to exceed the opportunity cost of capital.
• D)the NPV to be zero.

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Definitions:

Psychological Disorder

A pattern of behavioral or psychological symptoms that impact multiple areas of life and create distress for the person affected.

Genetic Factors

Aspects of an organism's genes that influence its traits and behaviors.

Environmental Factors

Components outside the organism that can affect its development, behavior, and survival.

Genotype

The genetic makeup of an organism, consisting of the alleles inherited from both parents, which influences physical and behavioral traits.