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.

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Definitions:

Congress

The bicameral legislature of the Federal Government of the United States, consisting of the House of Representatives and the Senate.

Lost Profits

Financial gains that could have been earned but were not because of a specific event or action that prevented such earnings.

Incidental Damages

Incidental damages refer to reasonable expenses incurred by a party as a result of another party’s breach of contract, including costs to mitigate damages.

Carrier

An entity that offers transportation services for goods or people, often used in the context of shipping or telecommunications.