As Long as the NPV of a Project Declines Smoothly

question 43

Multiple Choice

As long as the NPV of a project declines smoothly with increases in the discount rate,the project is acceptable if its:

• A) internal rate of return is positive.
• B) payback period is greater than one.
• C) rate of return exceeds the cost of capital.
• D)cash inflows equals the initial cost

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Definitions:

For Profit

relates to activities or organizations established with the primary goal of generating financial returns for owners or shareholders.

Non-profit

An organization that operates for purposes other than making a profit, often focused on furthering a social cause or shared goal.

De Jure

Pertaining to a state of affairs that is in accordance with law, officially recognized.

Foreign Corporation

A corporation that is registered to do business in a state or jurisdiction other than where it was originally incorporated.