The Decision Rule for Net Present Value Is To

question 50

Multiple Choice

The decision rule for net present value is to:

• A) accept all projects with cash inflows exceeding initial cost.
• B) reject all projects with rates of return exceeding the opportunity cost of capital.
• C) accept all projects with positive net present values.
• D)reject all projects lasting longer than 10 years.

---

Definitions:

Sales

The total revenue earned from selling goods or services over a specific time period.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, representing shareholders' ownership interest.

Residual Income

The net income that an investment or business generates above the minimum required return, often used in performance evaluation.

Net Operating Income

The total profit of a company after operating expenses are subtracted from gross income, but before taxes and interest are deducted.