Which of the Following Projects Would You Feel Safest in Accepting

question 34

Multiple Choice

Which of the following projects would you feel safest in accepting? Assume the opportunity cost of capital to be 12% for each project.

• A) "A" has a small, but negative, NPV.
• B) "B" has a positive NPV when discounted at 10%.
• C) "C's" cost of capital exceeds its rate of return.
• D) "D" has a zero NPV when discounted at 14%.

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Definitions:

Total Profits

The entirety of a company's earnings after all operating expenses, taxes, and costs have been deducted from its total revenue.

Varying Price

Implementing a strategy where the price of a product or service is adjusted over time or across markets to optimize sales volume, revenue, or market share.

Asset Value

The monetary worth of physical or intangible property owned by an individual or business.

Deadline

A specific date or time by which a task, project, or assignment must be completed.