If the Opportunity Cost of Capital for a Project Exceeds

question 34

Multiple Choice

If the opportunity cost of capital for a project exceeds the project's IRR,then the project has a(n) :

• A) positive NPV.
• B) negative NPV.
• C) acceptable payback period.
• D)borrowing projects

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Definitions:

Average Investor

An individual or entity that makes investment decisions based on typical financial goals and risk tolerance, often represented as a general public member.

Investment Contracts

Financial contracts that typically denote a type of investment security, entitling the investor to specific returns.

Securities Exchange Act

A U.S. law enacted in 1934 to govern the trading of securities, such as stocks and bonds, to protect investors against malpractice.

Securities Act

A U.S. law enacted in 1933 that requires transparency in the offer and sale of securities to protect investors from fraud.