A Problem with the Net Present Value Approach to Project

question 41

Multiple Choice

A problem with the net present value approach to project valuation is that:

• A)the opportunity to intervene in a project has a negative NPV.
• B)the opportunity to intervene in a project is worthless.
• C)it assumes that there is no opportunity for the investing company to intervene in the project after it has begun.
• D)it is inferior to the IRR method of project evaluation.

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Definitions:

Extracellular Thirst

A type of thirst caused by the reduction of the volume of the fluid found outside cells, often due to loss of blood or salt intake.

Abraham Maslow

A renowned American psychologist who is primarily recognized for establishing the hierarchy of needs according to Maslow, which is a concept of psychological well-being based on satisfying inherent human necessities in a specific order, ultimately leading to self-actualization.

Hierarchy Of Needs

A motivational theory in psychology comprising a five-tier model of human needs, from basic physiological needs to self-actualization.

Ventromedial Hypothalamus

A region of the brain implicated in the regulation of satiety, metabolism, and sexual behavior.