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

question 109

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 flows.
• D)soft capital rationing budget.

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Definitions:

Financial Statements

Reports that present the financial performance, position, and cash flows of a company, used by stakeholders to make informed decisions.

Generally Accepted Accounting Principles

A framework of accounting rules, standards, and procedures that companies must follow when compiling their financial statements in the United States.

Modified Opinion

A type of audit opinion suggesting that the auditor has reservations about certain aspects of the company's financial statements.

Qualified Opinion

An auditor's opinion suggesting that the financial statements of a firm are fairly presented, except for a particular area or exception.