Which of the Following Is Incorrect for a Borrowing Project

question 19

Multiple Choice

Which of the following is incorrect for a borrowing project?

• A) Its NPV graph rises as discount rates increase.
• B) Its cash flow at time zero is typically an inflow.
• C) Its NPV is positive.
• D)It's acceptable if IRR exceeds cost of capital.

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Definitions:

Accounts Payable

A liability to a creditor, carried on an open account, usually for purchases of goods and services.

Indirect Method

A way of reporting cash flows from operating activities in the cash flow statement by adjusting net income for changes in non-cash accounts.

Comparative Balance Sheet

A comparative balance sheet presents the financial position of a company at different points in time side by side, to analyze trends or changes in financial status.

Net Loss

Net loss refers to the result when a company's total expenses exceed its total revenues during a specific period, indicating a negative profitability.